VERMILLION, INC. (Form: 10-Q, Received: 08/14/2014 16:02:11)

ARTICLE XI

APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES

DUTIES OF CUSTODIAN

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON , D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30 , 2014

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-34810

Vermillion, Inc.

(Exact name of registrant as specified in its charter)


Delaware		33-0595156
(State or O ther J urisdiction of I ncorporation or O rganization)		(I.R.S. Employer Identification No.)
12117 Bee Caves Road, Building Three, Suite 100, Austin, Texas		78738
(Address of P rincipal E xecutive O ffices)		(Zip Code)

( 512) 519-0400

(Registrant’s T elephone N umber, I ncluding A rea C ode )

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):


Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer (Do not check if a smaller reporting company) ☐	Smaller reporting company ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐

As of July 3 1 , 201 4 , the registrant had 35,8 97 ,776 shares of common stock, par value $0.001 per share, outstanding.

VERMILLION, INC.

FORM 10-Q

Table of Contents


		Page
PART I	Financial Information
Item 1	Financial Statements	3
	Consolidated Balance Sheets as of June 30 , 2014 and December 31, 201 3 (unaudited)	3
	Consolidated Statements of Operations for the three and six months
	ended June 30 , 201 4 and 201 3 (unaudited)	4
	Consolidated Statements of Cash Flows for the six months ended June 30 , 201 4 and 201 3 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4	Controls and P rocedures	16
PART II	Other Information	17
Item 1	Legal Proceedings	17
Item 1A	Risk Factors	18
Item 6	Exhibits	18
SIGNATURES		19

Vermillion and OVA1 are registered trademarks of Vermillion, Inc.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Vermillion, Inc.

Consolidated Balance Sheets

(Amounts in Thousands, Except Share and Par Value Amounts)

(Unaudited)


	June 30,		December 31,
	2014		2013
Assets
Current assets:
Cash and cash equivalents	$	22,186	$	29,504
Accounts receivable		190		373
Prepaid expenses and other current assets		719		372
Total current assets		23,095		30,249
Property and equipment, net		416		391
Total assets	$	23,511	$	30,640
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,264	$	541
Accrued liabilities		2,096		1,283
Short-term debt		1,106		1,106
Deferred revenue		1,215		628
Total current liabilities		5,681		3,558
Deferred revenue		88		316
Total liabilities		5,769		3,874
Commitments and contingencies (Note 4)
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and
outstanding at June 30, 2014 and December 31, 2013, respectively		—		—
Common stock, $0.001 par value, 150,000,000 shares authorized at June 30, 2014
and December 31, 2013; 35,897,776 and 35,825,673 shares issued and
outstanding at June 30, 2014 and December 31, 2013, respectively		36		36
Additional paid-in capital		359,512		358,994
Accumulated deficit		(341,806)		(332,264)
Total stockholders’ equity		17,742		26,766
Total liabilities and stockholders’ equity	$	23,511	$	30,640

See accompanying notes to the consolidated financial statements.

Vermillion, Inc.

Consolidated Statements of Operations

(Amounts in Thousands, Except Share and Per Share Amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Revenue:
Product	$	211	$	210	$	402	$	424
License		113		113		227		227
Total revenue		324		323		629		651
Cost of revenue:
Product		88		34		143		71
Total cost of revenue		88		34		143		71
Gross profit		236		289		486		580
Operating expenses:
Research and development (1)		1,057		554		2,210		1,038
Sales and marketing (2)		2,766		920		4,870		1,992
General and administrative (3)		1,971		934		2,959		2,271
Total operating expenses		5,794		2,408		10,039		5,301
Loss from operations		(5,558)		(2,119)		(9,553)		(4,721)
Interest income		12		6		26		8
Other income (expense), net		(9)		(4)		(15)		25
Loss before income taxes		(5,555)		(2,117)		(9,542)		(4,688)
Income tax benefit (expense)		—		—		—		—
Net loss	$	(5,555)	$	(2,117)	$	(9,542)	$	(4,688)
Net loss per share - basic and diluted	$	(0.15)	$	(0.11)	$	(0.27)	$	(0.27)
Weighted average common shares used to compute basic and diluted net loss per common share		35,853,027		19,637,161		35,840,491		17,431,641
Non-cash stock-based compensation expense included in operating expenses:
(1) Research and development	$	31	$	12	$	71	$	32
(2) Sales and marketing		44		32		69		86
(3) General and administrative		290		14		359		121

See accompanying notes to the consolidated financial statements.

Vermillion, Inc.

Consolidated Statements of Cash Flows

(Amounts in Thousands)

(Unaudited)


	Six Months Ended June 30,
	2014		2013
Cash flows from operating activities:
Net loss	$	(9,542)	$	(4,688)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash license revenue		(227)		(227)
Depreciation and amortization		58		39
Stock-based compensation expense		479		228
Warrants issued for services		20		11
Changes in operating assets and liabilities:
Accounts receivable		183		(19)
Prepaid expenses and other assets		(347)		108
Accounts payable, accrued liabilities and other liabilities		1,536		186
Deferred revenue		586		466
Net cash used in operating activities		(7,254)		(3,896)
Cash flows from investing activities:
Purchase of property and equipment		(83)		—
Net cash used in investing activities		(83)		—
Cash flows from financing activities:
Proceeds from sale of common stock, net of issuance costs		-		11,757
Proceeds from issuance of common stock from exercise of stock options		19		524
Net cash provided by financing activities		19		12,281
Net increase (decrease) in cash and cash equivalents		(7,318)		8,385
Cash and cash equivalents, beginning of period		29,504		8,007
Cash and cash equivalents, end of period	$	22,186	$	16,392
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	—	$	—

See accompanying notes to the consolidated financial statements.

Vermillion, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Organization

Vermillion, Inc. (“Vermillion” ) , develops and commercializes diagnostic tests in the fields of gynecologic oncology and women’s health. In March 2010, the Company commercially launched the OVA1 ® ovarian tumor triage test (“OVA1”). The Company distribute s OVA1 through Quest Diagnostics Incorporated (“Quest Diagnostics”), a related party (see Note 3 ). O n June 23, 2014, the Company open ed a CLIA certified clinical laboratory, ASPiRA LABS , Inc. The terms “Vermillion,” “the Company,” “we,” “us,” and “our” refer to Vermillion and its wholly-owned subsidiaries as a whole, unless the context otherwise requires.

Liquidity

There can be no assurance that the Company will achieve or sustain profitability or positive cash flow from operations. However, management believes that the current working capital position will be sufficient to meet the Company’s working capital needs for at least the next 12 months. Management expects cash from OVA1 sales to be the Company’s only material, recurring source of cash in 2014.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.

The unaudited consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. The consolidated balance sheet at December 31, 201 3 included in this report has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Accordingly, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 201 3 , included in Vermillion’s Annual Report on Form 10-K which was filed with the Securities and Exchange Commission (the “SEC”) on March 3 1, 201 4 .

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated results.

Significant Accounting and Reporting Policies

The Company ha s made no significant changes in its critical accounting policies and estimates from those disclosed in Vermillion’s Annual Report on Form 10-K for the fiscal year ended December 31, 201 3 .

2. NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” (ASU 2014-09), which creates a new Topic, Accounting Standards Codification Topic 606. The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting standard is effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. We are currently evaluating the impact of adopting this guidance.

In June 2014, the FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” (ASU 2014-12). ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in ASU 2014-12 are effective for annual periods and interim periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (a) prospectively to all awards granted

or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

3 . STRATEGIC ALLIANCE AND SECURED LINE OF CREDIT WITH QUEST DIAGNOSTICS INCORPORATED

Quest Diagnostics is a holder of the Company’s common stock. In July 2005, the Company entered into a Strategic Alliance Agreement (as amended, the “Strategic Alliance Agreement”) with Quest Diagnostics to develop and commercialize up to three diagnostic tests from the Company’s product pipeline. In connection with the Strategic Alliance Agreement, the Company entered into a c redit a greement with Quest Diagnostics, pursuant to which Quest Diagnostics provided the Company with a $10,000,000 secured line of credit collateralized by certain intellectual property assets of the Company . Pursuant to the Strategic Alliance Agreement, Quest Diagnostics selected two diagnostic tests to be commercialized, a peripheral arterial disease diagnostic test (differentiated from the Company’s existing program) and OVA1. The c redit a greement provided for the forgiveness of portions of the amounts borrowed under the secured line of credit upon the achievement of certain milestones related to the development, regulatory approval and commercialization of certain diagnostic tests. If not otherwise forgiven, the $10,000,000 principal amount outstanding under this secured line of credit became due and payable i n October 2012. Through June 30 , 2014, a total of $3,000,000 has been acknowledged as forgiven by Quest Diagnostics based upon milestone achievement.

The Company believe s that, in September 2009, when the United States Food and Drug Administration (the “FDA”) cleared the Company’s application for a licensed laboratory test of OVA1 to be commerci alized, the Company achieved a milestone under the c redit a greement, resulting in a $1,000,000 reduction of the outstanding principal amount borrowed under the c redit a greement. However, Quest Diagnostics has disputed whether this milestone has been achieved.

In S eptember 2009, the Company achieved another milestone under the c redit a greement, resulting in a $3,000,000 further reduction in the principal amount borrowed under the c redit a greement. Although the Company believed that, following this reduction, the principal balance under the line of credit was $6,000,000 , the Company made monthly payments to Quest Diagnostics on the secured line of credit based on a principal balance of $7,000,000 , resulting in a curtailment of the principal balance of $106,000 . However, Quest Diagnostics has disputed that such additional principal curtailment was made.

I n October 2012, the Company paid Quest Diagnostics approximately $5,894,000 of principal which the Company believe s represent ed payment in full of all then outstanding principal under the secured line of credit. However, the Company continue s to show the amount of the liability as $1,106,000 as of June 30 , 2014 because Quest Diagnostics has disputed that the $1,000,000 milestone was met and the $106,000 principal curtailment was made.

Unrelated to the debt dispute described above, i n May 2013, the Company sent Quest Diagnostics a notice of default under the Strategic Alliance Agreement relating to a number of its material violations, breaches and failures to perform under the Strategic Alliance Agreement. The Strategic Alliance Agreement states that if a party fails to cure material defaults within 90 days of the date of the notice of default, the other party has the right to terminate the Strategic Alliance Agreement. Quest Diagnostics has disputed the effectiveness of the notice of default from the Company . I n August 2013, the Company sent Quest Diagnostics a notice of termination. Notwithstanding the termination, the Company agreed that Quest Diagnostics can continue to make OVA1 available to healthcare providers on the same financial terms following the termination while negotiating in good faith towards an alternative business structure. Prior to the termination, Quest Diagnostics had the non-exclusive right to commercialize OVA1 on a worldwide basis, with exclusive commercialization rights in the clinical reference lab oratory marketplace in the United States, India, Mexico, and the United Kingdom through September 11, 2014, with the right to extend the exclusivity period for one additional year. Quest Diagnostics has disputed the effectiveness of the Company’s notice of termination.

4 . COMMITMENT AND CONTINGENCIES

The Company lease s a facility located in Austin, Texas with an annual base rent of $ 83 ,000 and annual estimated common area charges, taxes and insurance of $3 9 ,000 . This lease expires on May 31, 201 6 .

5. STOCKHOLDERS’ EQUITY

Stock Option Exercises

During the three and six months ended June 30, 2014, options to purchase 5,000 and 11,103 shares of Vermillion common stock were exercised for total proceeds to the Company of $8,100 and $19,100 , respectively.

2010 Stock Incentive Plan

The Company’s employees, directors, and consultants are eligible to receive awards under the Amended and Restated Vermillion, Inc. 2010 Stock Incentive Plan (the “2010 Plan”). The 2010 Plan permits the granting of a variety of awards, including stock options, share appreciation rights, restricted shares, restricted share units, unrestricted shares, deferred share units, performance and cash-settled awards, and dividend equivalent rights. The 2010 Plan provides for issuance of up to 3,622,983 shares of common stock, par value $0.001 per share, under the 2010 Plan, subject to adjustment as provided in the 2010 Plan.

Employee Stock-Based Compensation

During the three and six months ended June 30, 2014, the Company awarded 0 and 152,000 shares of restricted stock under the 2010 Plan having a fair value of approximately $470,000 to Vermillion’s Board of Directors as payment for services in 2014. Rights to 48,500 shares of restricted stock were subsequently forfeited or contractually waived by Vermillion directors during the three months ended June 30, 2014. The remaining shares of restricted stock vested 50% on June 1, 2014 and will vest 25% on each of September 1, 2014 and December 1, 2014 .

In January 2014, the Company granted 151,500 stock options with an exercise price of $2.88 per share to Vermillion’s Chairman of the Board of Directors. These stock options vest over a four year period with 25% of the stock options vesting on December 12, 2014 and the balance in 36 equal monthly installments thereafter. On April 23, 2014, the Company granted 348,500 stock options with an exercise price of $2.90 per share to Vermillion’s President, Chief Executive Officer and Chairman of the Board of Directors. These stock options vest in 48 equal monthly installments from the date of the grant.

During the six months ended June 30, 2014, the Company also granted to certain other Vermillion officers and employees approximately 422,000 stock options with an exercise price of $3.09 per share which vest in 48 equal monthly installments from the date of the grant and 22,500 options with an exercise price of $2.87 per share which vest over a four year period with 25% of the options vesting on the employee’s one year anniversary and the balance in 36 equal monthly installments thereafter.

The allocation of employee stock-based compensation expense by functional area for the three and six months ended June 30, 2014 and 2013 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2014		2013		2014		2013
Research and development	$	31	$	12	$	71	$	30
Sales and marketing		44		32		69		86
General and administrative		266		9		324		110
Total	$	341	$	53	$	464	$	226

6 . LOSS PER SHARE

The Company calculate s basic loss per share using the weighted average number of common shares outstandi ng during the period. Because the Company is in a net loss position, diluted loss per share is calculated using the weighted average number of common shares outstanding and excludes the effects of 2,92 2,619 and 1 3,329,468 potential common shares as of June 30 , 201 4 and 201 3 , respectively, that are antidilutive. Potential common shares include incremental shares of common stock issuable upon the exercise of outstanding warrants, stock options, and restricted stock awards.

7 . RELATED PARTY TRANSAC TIONS

Quest Diagnostics

Quest Diagnostics is a stockholder and was the holder of the Company’s secured line of credit (see Note 3 ). Accounts receivable from Quest Diagnostics under the Strategic Alliance Agreement totaled $ 190,000 and $ 373 ,000 at June 30 , 201 4 and December 31, 201 3 , respectively.

Item 2 . Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward- Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties. Words such as “may,” “expects,” “intends,” “anticipates,” “believes,” “estimates,” “plans,” “seeks,” “could,” “should,” “continue,” “will,” “potential,” “projects” and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements speak only as of the date on which this report is filed with the SEC, and the Company does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances after such date. Forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict. Examples of language found in forward-looking statements include the following:

projections of or expectations regarding our future revenue, results of operations and financial condition;

intentions to address clinical questions related to early disease detection, treatment response, monitoring of disease progression, prognosis and other issues in the fields of oncology and women’s health;

anticipated efficacy of our products, product development activities and product innovations;

our expected ability to consolidate the five OVA1 immunoassays on a single mainstream integrated diagnostic automation platform;

expected competition and consolidation in the markets in which we compete;

plans with respect to ASPiRA LABS, Inc. (“ASPiRA LABS”);

expectations regarding existing and future collaborations and partnerships;

our belief that particular biomarker discoveries may have diagnostic and/or therapeutic utility;

achieving milestones in product development, future regulatory or scientific submissions and presentations ;

our continued ability to comply with applicable government al regulations;

our continued ability to expand and protect our intellectual property portfolio;

anticipated future losses;

expected levels of expenditures;

expected market adoption of our diagnostic tests, including OVA1 ;

anticipated results of clinical trials, post-market studies required by FDA, and publications on OVA1;

the amount of financing anticipated to be required to fund our planned operations;

our prospects for obtaining support of medical or professional societies (e.g., Society for Gynecologic Oncology (“SGO”), National Comprehensive Cancer Network (“NCCN”) and American Congress of Obstetricians and Gynecologists (“ACOG”)) through “guidelines”, “position statements” and the like;

the financial or market share projections which could result from positive guidelines or position statements; and

our expected reimbursement for our products, and our expected ability to obtain such reimbursement, from third- party payers such as private insurance companies and government insurance plans.

Forward-looking statements are subject to significant risks and uncertainties, including those discussed in Part II, Item 1A “Risk Factors” of our quarterly report on Form 10-Q for the quarter ended March 31, 2014 and those discussed in Part I, Item 1A “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2013, that could cause actual results to differ materially from those projected in such forward-looking statements due to various factors, including increase the volume of OVA1 sales; our ability to market our test through sales channels other than Quest Diagnostics; uncertainty in how we recognize future revenue following termination of the Quest Diagnostics Strategic Alliance Agreement; failures by third- party payers to reimburse OVA1 or changes or variances in reimbursement rates; our ability to secure additional capital on acceptable terms to execute our business plan; our ability to commercialize OVA1 outside the United States; our ability to develop and commercialize additional diagnostic products and achieve market acceptance with respect to these products; our ability to compete successfully; our ability to obtain any regulatory approval for our future diagnostic products; our suppliers’ ability to comply with FDA requirements for production, marketing and post market monitoring of our products; our ability to maintain sufficient or acceptable supplies of immunoassay kits from our suppliers; our ability to continue to develop, protect and promote our proprietary technologies ; future litigation against us, including infringement of intellectual property and product liability exposure; our ability to retain key employees; business interruptions; legislative actions resulting in higher compliance costs; changes in healthcare policy; our ability to comply with environmental laws; uncertainty regarding our ability to generate sufficient demand for ASPiRA LABS’ services to cover the laboratory’s operating costs; uncertainty regarding our ability to comply with laws and regulations (including the additional laws and regulations that apply to us in connection with the operation of ASPiRA LABS) and the potential consequences of any failure to comply with such laws and regulations; the potentially low liquidity and trading volume of our common stock and concentration in the ownership of our common stock; volatility in the price of our common stock; actions of activist stockholders; and potential dilution caused by future sale of our common stock or other securities to meet our capital requirements. We believe it is important to communicate our expectations to our investors. However, there may be events in the future that we are not able to accurately predict or that we do not fully control that could cause actual results to differ materially from those expressed or implied in our forward-looking statements.

Overview

Our vision is to drive the advancement of women’s health by providing innovative methods to detect, monitor and manage the treatment of gynecologic cancers and other related diseases .

We are dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Our tests are intended to help guide decisions regarding patient

treatment, which may include decisions to refer patients to specialists, to perform additional testing, or to assist in the selection of therapy. A distinctive feature of our approach is to combine multiple markers into a single, reportable index score that has higher diagnostic accuracy than its constituents. We concentrate on our development of novel diagnostic tests in the fields of gynecologic oncology and women’s health, with an initial focus on ovarian cancer. We also intend to address clinical questions related to early disease detection, treatment response, monitoring of disease progression, prognosis and others through collaborations with leading academic and research institutions.

Our lead product, OVA1, an ovarian cancer blood test, was cleared by the United States Food and Drug Administration (“FDA”) in September 2009.

In April 2014, Vermillion announced the launch of ASPiRA LABS, which specialize s in applying biomarker-based technologies to address critical needs in the management of gynecologic cancers. ASPiRA LAB S provide s expert diagnostic processing and results using a state-of-the-art biomarker-based diagnostic algorithm to inform clinical decision making and advance personalized treatment plans. In addition, ASPiRA LABS, a CLIA certified national lab based near Austin, Texas, serve s as an education al and resource hub for healthcare professionals and women facing surgery for ovarian masses that are potentially cancer and related gynecologic conditions. T he lab process es diagnostic tests and clinical decision aids for women’s health in ovarian cancer and plans to expand to other gynecologic conditions with high unmet need. ASPiRA began accepting samples on June 23, 2014.

We are focused on the execution of four core strategic business drivers in ovarian cancer diagnostics to build long-term value for our investors:

Maximizing the existing OVA1 opportunity in the United States (“US”) by expanding our market reach beyond our business relationship with Quest Diagnostics and taking the lead in commercialization, payer coverage and medical guidelines . This includes the launch of a CLIA certified clinical laboratory, ASPiRA LABS in June 2014;

Improve OVA1 performance by seeking FDA clearance of a potentially better performing bio-marker panel while migrating OVA1 to a global testing platform ;

Building an expanded patient base by seeking FDA approval and launching a next generation multi-marker ovarian cancer test to monitor patients at risk for ovarian cancer ; and

Expanding our product offerings by adding additional gynecological tests such as longitudinal CA 125II testing.

We believe that these business drivers will contribute significantly to addressing unmet medical needs for women faced with ovarian cancer and the continued development of our business.

Our lead product, OVA1, was cleared by the FDA in September 2009. OVA1 addresses a clear clinical need, namely the pre-surgical identification of women who are at high risk of having a malignant ovarian tumor. Numerous studies have documented the benefit of referral of these women to gynecologic oncologists for their initial surgery. Prior to the clearance of OVA1, no blood test had been cleared by the FDA for physicians to use in the pre-surgical management of ovarian adnexal masses. OVA1 is a qualitative serum test that utilizes five well-established biomarkers and proprietary FDA-cleared software to determine the likelihood of malignancy in women over age 18, with a pelvic mass for whom surgery is planned. OVA1 was developed through large pre-clinical studies in collaboration with numerous academic medical centers encompassing over 2,500 clinical samples. OVA1 was fully validated in a prospective multi-center clinical trial encompassing 27 sites reflective of the diverse nature of the clinical centers at which ovarian adnexal masses are evaluated. In 2012, we completed a second pivotal clinical study of OVA1 called the “OVA500 study” and led by Dr. Robert E. Bristow, Director of Gynecologic Oncology Services with University of California Irvine Healthcare. The study evaluated OVA1 diagnostic performance in a population of 494 evaluable patients who underwent surgery for an adnexal mass after enrollment by a non-gynecologic oncologist. In February 2013, the OVA500 study was published in the peer-reviewed journal Gynecologic Oncology , which enjoys the highest impact factor rating of any journal worldwide focused on gynecologic oncology. Since many professional medical societies stress the importance of multiple independent clinical trials as so-called “evidence levels”, we also believe that the OVA500 study contributes to a higher evidence level relative to OVA1’s utility in the medical management of adnexal masses.

In addition to these pivotal studies, three follow-on studies have been published bringing the number of full research articles on OVA1 clinical performance to a total of five peer-reviewed publications. Together, we believe these data provide strong clinical evidence that OVA1 improves the pre-surgical detection of ovarian cancer, across all stages or subtypes, in patients undergoing surgery for a suspicious ovarian mass.

The American Medical Association ( “ AMA ” ) Current Procedural Terminology ( “ CPT® ” ) Panel approved a Category I CPT code (81503) for OVA1, which became effective in January 2013.

Dr. Bristow presented another study at the Society of Gynecological Oncology (“SGO”) in March 2013 which was published in the journal Obstetrics & Gynecology (also known as the Green Journal) in June 2013. It was based on the medical records of

13,321 women with epithelial cancer, the most common type of ovarian cancer, diagnosed from 1999 to 2006 in California. Only 37 percent of these patients received treatment that adhered to guidelines set by the NCCN, an alliance of 23 major cancer centers with expert panels that analyze, research and recommend cancer treatments.

The study found that surgeons who operated on 10 or more women a year for ovarian cancer, and hospitals that treated 20 or more a year, were more likely to adhere to NCCN guidelines and their patients lived longer. Among women with advanced disease — the stage at which ovarian cancer is usually first found — 35 percent survived at least five years if their care met the guidelines, compared with 25 percent of those whose care fell short.

In June 2013, the Society for Gynecologic Oncology (“SGO”) issued a new position statement on OVA1. This second SGO statement on OVA1 since its FDA clearance in 2009 represents another significant step toward acceptance of OVA1 as the standard of care for pre-surgically evaluating the risk of ovarian cancer in women with adnexal masses. The statement , titled “Multiplex Serum Testing for Women with Pelvic Mass”, reads:

“Blood levels of five proteins in women with a known ovarian mass have been reported to change when ovarian cancer is present. Tests measuring these proteins may be useful in identifying women who should be referred to a gynecologic oncologist. Recent data have suggested that such tests, along with physician clinical assessment, may improve detection rates of malignancies among women with pelvic masses planning surgery. [1],[2] Results from such tests should not be interpreted independently, nor be used in place of a physician’s clinical assessment. Physicians are strongly encouraged to reference the American Congress of Obstetricians and Gynecologists’ 2011 Committee Opinion “The Role of the Obstetrician-Gynecologist in the Early Detection of Epithelial Ovarian Cancer” to determine an appropriate care plan for their patients. It is important to note that no such test has been evaluated for use as, nor cleared by, the FDA as a screening tool for ovarian cancer. SGO does not formally endorse or promote any specific products or brands. ”

[1] Bristow RE, Smith A, Zhang Z, Chan DW, Crutcher G, Fung ET, et al. Ovarian malignancy risk stratification of the adnexal mass using a multivariate index assay. Gynecol Oncol 2013;128: 252–259

[2] Ueland FR, Desimone CP, Seamon LG, Miller RA, Goodrich S, Podzielinski I, et al. Effectiveness of a multivariate index assay in the preoperative assessment of ovarian tumors. Obstet Gynecol 2011;117:1289-1297. ”

The position statement does two things:

Lists as references the publications of OVA1's two pivotal clinical studies, comprised of the original FDA validation study published in June 2011 and the OVA500 "intended use" study published in 2013. Together, this offers an extensive, peer-reviewed proof source for physicians and payers to assess OVA1's clinical performance and comparative medical benefits versus today's standard of care.

Places OVA1 use in the context of current ACOG practice guidelines, where CA125 has been used off-label for many years to predict malignancy before surgery, although with inferior performance.

In June 2013 our collaborators from Johns Hopkins Biomarker Discovery and Translation Center presented data from “proof of concept” work to identify markers with high clinical specificity that may complement OVA1. These results were presented in a poster at the annual meeting of the American Society for Clinical Oncology ( “ ASCO ” ) by Dr. Zhen Zhang and co-workers. The study identified a set of 5 biomarkers (CA125, prealbumin, IGFBP2, IL6, and FSH) which optimally reduced false positives among a targeted set of OVA1-positive benign patients. This panel was subsequently tested in a 50/50 cross-validation strategy against a sampling of OVA500 patients (N=384), to evaluate specificity and other diagnostic parameters. At a fixed sensitivity of 90%, the median specificity of models using the new panel in testing was 80.6%. The mean and median absolute improvements over that of OVA1 were 18.6% and 20.3%, respectively. The new panel demonstrated the possibility to improve specificity over that of the existing OVA1 algorithm, while maintaining a high sensitivity in pre-surgical assessment of malignancy. The work will be submitted for publication in 2014.

We are in the process of identifying intended use(s) and establishing a regulatory or commercial pathway for a potential next-generation OVA product utilizing this or another new panel. Any actual product development will likely differ significantly depending on a number of technical and commercial factors.

A study published in July 2014 in The American Journal of Obstetrics & Gynecology , examined the relationship between two imaging methods, ultrasound and computed tomography, and the OVA1 test result in assessing the risk of ovarian cancer among patients planning surgery for an ovarian mass. Using data obtained from 1,100 ovarian mass surgery patients in two previous pivotal trials of OVA1’s clinical performance, conducted in 2007 and 2012, the study found that adding OVA1 reduced the number of ovarian cancers missed with imaging alone by 85-90%. Specifically, ultrasound alone missed 23.3% of ovarian cancers that were presented b ut when OVA1 was added this decreased to 2.9%. When CT was used alone, 20.2% of ovarian cancers were missed but this rate fell to 2.9% when OVA1 was added. Additionally, the study found that the combination of ultrasound and OVA1 detected 95% of ovarian cancers in a subgroup of early-stage patients.

Current and former academic and research institutions that we have or have had collaborations with include the Johns Hopkins University School of Medicine (“JHU”); the University of Texas M.D. Anderson Cancer Center (“M.D. Anderson”); Moffitt Cancer Cancer (“Moffitt”); University College London (“UCL”); the University of Texas Medical Branch (“UTMB”); the Katholieke Universiteit Leuven; Clinic of Gynecology and Clinic of Oncology, Rigshospitalet, Copenhagen University Hospital (“Rigshospitalet”); the Ohio State University Office of Sponsored Programs (“OSU”); Stanford University (“Stanford”); the University of Kentucky (“UK”) and the University of California at Irvine.

Novitas Solutions (formerly Highmark Medicare Services), a Medicare contractor, covers and reimburses for OVA1. In December 2013, the Centers for Medicare and Medicaid Services (“CMS”) made its final determination and authorized Medicare contractors to set prices for Multianalyte Assays with Algorithmic Analyses (“ MAAA”) test Current Procedural Terminology (“CPT”®) codes when they determine it is payable. CMS also validated that an algorithm has unique value by specifying that the gap-fill process and not cross-walk should be used by contractors to price MAAA tests. We expect OVA1 to be priced using the gap-fill method. We will be engaged in that process in 2014 for pricing effective January 1, 2015. This decision also sets a precedent for recognizing the value of biomarker developed tests to clinical decision-making and healthcare efficiencies.

I ndependent BlueCross BlueShield plans representing approximately 8.0 million lives provide coverage for OVA1. In total, including Medicare and other private payers, approximately 5 5.5 million patients have access and coverage for OVA1.

Under the terms of our Strategic Alliance Agreement with Quest Diagnostics , which we terminated in August 2013 , Quest Diagnostics was required to pay us a fixed payment of $50 per OVA1 test performed, as well as 33% of its “gross margin” from revenue from performing OVA1 tests domestically, as that term is defined in the Strategic Alliance Agreement. Prior to the termination of the agreement, Quest Diagnostics had the right to be the exclusive clinical reference laboratory marketplace provider of OVA1 tests in its exclusive territory, which include d the US, Mexico, the United Kingdom and India through September 11, 2014. Quest Diagnostics ha d the right to extend its exclusivity period for an additional year on the same terms and conditions. In August 2013, we sent Quest Diagnostics a notice of termination. Notwithstanding the termination, we agreed that Quest could continue to make OVA1 available to healthcare providers on the same financial terms following the termination while negotiating in good faith towards an alternative business structure. Quest Diagnostics has disputed the effectiveness of our notice of termination.

New Chief Executive Officer

On April 23, 2014, Vermillion’s Board of Directors voted to appoint Vermillion’s Chairman of the Board, James T. LaFrance, as the Company’s President and Chief Executive Officer, effective as of April 23, 2014. Mr. LaFrance has had a highly successful track record that spans 30 years of diagnostic commercial experience, predominantly in sales, marketing and general management.

As a result of this change, Mr. LaFrance will no longer receive compensation for his role as Chairman of the Board.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates as disclosed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 .

Results of Operations - Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013

The selected summary financial and operating data of Vermillion for the three months ended June 30 , 2014 and 2013 were as follows:



	Three Months Ended June 30,				Increase (Decrease)
(dollars in thousands)	2014		2013		Amount		%
Revenue:
Product	$	211	$	210	$	1	0
License		113		113		—	—
Total revenue		324		323		1	0
Cost of revenue:
Product		88		34		54	159
Total cost of revenue		88		34		54	159
Gross profit		236		289		(53)	(18)
Operating expenses:
Research and development		1,057		554		503	91
Sales and marketing		2,766		920		1,846	201
General and administrative		1,971		934		1,037	111
Total operating expenses		5,794		2,408		3,386	141
Loss from operations		(5,558)		(2,119)		(3,439)	162
Interest income		12		6		6	100
Other expense, net		(9)		(4)		(5)	125
Loss before income taxes		(5,555)		(2,117)		(3,438)	162
Income tax benefit (expense)		—		—		—	—
Net loss	$	(5,555)	$	(2,117)	$	(3,438)	162

Product Revenue . Product revenue was $211 ,000 for the three months ended June 30, 2014 compared to $2 1 0 ,000 for the same period in 201 3 . We recognized product revenue for the sale of OVA1 only through Quest Diagnostics at the $50 fixed fee per test during both periods. The number of OVA1 tests performed was approximately 4,22 3 OVA1 tests during the three months ended June 30 , 2014 compared to approximately 4, 184 OVA1 tests for the same period in 2013. Product revenue was flat quarter over quarter. However, we expect the launch of ASPiRA LABS to increase product revenue in the second half of 2014 as supported by an expanded sales team. ASPiRA LABS began accepting test samples on June 23, 2014.

Cost of Revenue. Cost of product revenue increased $54,000 or 159% compared to the same period in 2013 . Cost of product revenue for the three months ended June 30, 2014 includes $49,000 for costs of ASPiRA LABS incurred after the lab began accepting test samples on June 23, 2014 and includes non-recurring lab start-up costs. With the launch of ASPiRA LABS, we expect cost of revenue to increase significantly in future periods due to ongoing costs of operating ASPiRA LABS and performing the OVA1 test.

Research and Development Expenses . Research and development expenses represent costs incurred to develop our technology and carry out clinical studies, and include personnel-related expenses, regulatory costs, reagents and supplies used in research and development laboratory work, infrastructure expenses, contract services and other outside costs. Research and development expenses also include costs related to activities performed under contracts with our collaborators and strategic partners. Research and development expenses for the three months ended June 30, 2014 increased $ 503 ,000 or 91 % compared to the same period in 2013. This increase was primarily due to increased efforts in the second quarter of 2014 associated with our collaboration with Johns Hopkins University School of Medicine advancing our platform migration and next-generation diagnostic test. In addition, we increased research and development headcount compared to the same period in 2013.

Sales and Marketing Expenses . Our sales and marketing expenses consist primarily of personnel-related expenses, education and promotional expenses, and infrastructure expenses. These expenses include the costs of educating physicians, laboratory personnel and other healthcare professionals regarding OVA1. Sales and marketing expenses also include the costs of sponsoring continuing medical education, medical meeting participation, and dissemination of scientific and health economic publications. Sales and marketing expenses increased $1 , 846 ,000 or 201 %, for the three months ended June 30, 2014 compared to the same period in 2013. The increase was primarily due to increased personnel and personnel-related expenses from our sales force expansion in early April 2014 as well as costs incurred in the establishment and branding of ASPiRA LABS in 2014 compared to the same period in 2013. We also incurred expenses for health economic and outcomes studies during the three months ended June 30, 2014 , while there were no such expenses in the comparable period in 2013.

same period in 2013. The change was primarily due to a one-time $ 416 ,000 cost of severance for our former President and Chief Executive Officer and $4 33 ,000 of pre-opening costs incurred for ASPiRA LABS prior to June 23, 2014 (the opening date for ASPiRA LABS).

We expect general and administrative expenses to decrease in future periods as the one-time items incurred during the three months ended June 30, 2014 are not expected to recur.

Results of Operations - Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013

The selected summary financial and operating data of Vermillion for the six months ended June 30 , 2014 and 2013 were as follows:



	Six Months Ended June 30,				Increase (Decrease)
(dollars in thousands)	2014		2013		Amount		%
Revenue:
Product	$	402	$	424	$	(22)	(5)
License		227		227		—	—
Total revenue		629		651		(22)	(3)
Cost of revenue:
Product		143		71		72	101
Total cost of revenue		143		71		72	101
Gross profit		486		580		(94)	(16)
Operating expenses:
Research and development		2,210		1,038		1,172	113
Sales and marketing		4,870		1,992		2,878	144
General and administrative		2,959		2,271		688	30
Total operating expenses		10,039		5,301		4,738	89
Loss from operations		(9,553)		(4,721)		(4,832)	102
Interest income		26		8		18	225
Other income (expense), net		(15)		25		(40)	(160)
Loss before income taxes		(9,542)		(4,688)		(4,854)	104
Income tax benefit (expense)		—		—		—	—
Net loss	$	(9,542)	$	(4,688)	$	(4,854)	104

Product Revenue . Product revenue was $402,000 for the six months ended June 30, 2014 compared to $424,000 for the same period in 2013. We recognized product revenue for the sale of OVA1 only through Quest Diagnostics at the $50 fixed fee per test during both periods. The number of OVA1 tests performed by Quest Diagnostics decreased 5 % to approximately 8,040 OVA1 tests during the six months ended June 30, 2014 compared to approximately 8,458 OVA1 tests for the same period in 2013. Product revenue also decreased for the six months ended June 30, 2014 compared to the same period in 2013 due to a reorganization of sales resources during the first quarter of 2014 in addition to having several open sales representative positions in key territories in the 2014 period. However, we expect the launch of ASPiRA LABS to increase product revenue in the second half of 2014 as supported by an expanded sales team. ASPiRA LABS began accepting test samples on June 23, 2014.

Cost of Revenue. Cost of product revenue increased $72,000 or 101% compared to the six months ended June 30, 2013. Cost of product revenue for the six months ended June 30, 2014 includes $49,000 for costs of ASPiRA LABS after the lab began accepting samples on June 23, 2014 including non-recurring lab start- up costs . With the launch of ASPiRA LABS, we expect cost of revenue to increase significantly in future periods due to ongoing costs of operating ASPiRA LABS and performing the OVA1 test.

Research and Development Expenses . Research and development expenses represent costs incurred to develop our technology and carry out clinical studies, and include personnel-related expenses, regulatory costs, reagents and supplies used in research and development laboratory work, infrastructure expenses, contract services and other outside costs. Research and development expenses also include costs related to activities performed under contracts with our collaborators and strategic partners. Research and development expenses for the six months ended June 30, 2014 increased $1,172,000 , or 1 13 % compared to the same period in 2013. This increase was primarily due to increased efforts in the first and second quarters of 2014 associated with our collaboration with Johns Hopkins University School of Medicine advancing our platform migration and next-generation diagnostic test. In addition, we increased research and development headcount compared to the same period in 2013.

same period in 2013. The increase was primarily due to increased personnel and personnel-related expenses from our sales force expansion in early April 2014 as well as costs incurred in the establishment and branding of ASPiRA LABS in 2014 compared to the same period in 2013. We also incurred expenses for health economic and outcomes studies during the six months ended June 30, 2014 while there were no such expenses in the comparable period in 2013.

General and Administrative Expenses . General and administrative expenses consist primarily of personnel-related expenses, professional fees and other costs, including legal, finance and accounting expenses and other infrastructure expenses. General and administrative expenses increased by $6 88,000, or 30%, for the six months ended June 30, 2014 compared to the same period in 2013. The change was primarily due to a one-time $ 416 ,000 cost of severance for our former President and Chief Executive Officer and $5 52 ,000 of pre-opening costs incurred for ASPiRA LABS prior to June 23, 2014 (the opening date for ASPiRA LABS).

Liquidity and Capital Resources

We plan to continue to expend resources in the selling and marketing of OVA1 and developing additional diagnostic tests.

We have incurred significant net losses and negative cash flows from operations since inception. At June 30, 2014, we had an accumulated deficit of $3 41 , 806 ,000 and stockholders’ equity of $17, 742 ,000. As of June 30, 2014, we had $2 2,186 ,000 of cash and cash equivalents and $ 5, 68 1 ,000 of current liabilities.

There can be no assurance that the Company will achieve or sustain profitability or positive cash flow from operations. However, the Company believes that its current working capital position will be sufficient to meet its working capital needs for at least the next 12 months. The Company expects cash from OVA1 sales to be its only material, recurring source of cash in 2014.

Cash and cash equivalents as of June 30, 2014 and December 31, 2013, were $2 2,186 ,000 and $29,504,000, respectively. Working capital was $ 17, 414 ,000 and $26,691,000 at June 30, 2014 and December 31, 2013, respectively.

Net cash used in operating activities was $ 7,254 ,000 for the six months ended June 30, 2014 compared to $3,896,000 for the six months ended June 30, 2013. The increase in net cash used in operating activities resulted primarily from an increase in net loss reported of $ 9, 542 ,000 for the six months ended June 30, 2014 compared to $4,688,000 for the comparable period in 2013 partially offset by changes in operating assets and liabilities including a $1, 536 ,000 increase in accounts payable and accrued liabilities .

Net cash used by investing activities for the six months ended June 30, 2014 was $ 83 ,000 related to the purchases of property and equipment. There was no net cash used in investing activities for the six months ended June 30, 2013.

Net cash provided by financing activities for the six months ended June 30, 2014 was $1 9 ,000 which consists of proceeds from stock option exercises. Net cash provided by financing activities for the six months ended June 30, 2013 was $12,281,000 which resulted from the $11,757,000 net proceeds from our May 2013 private placement as well as $524,000 from proceeds from issuance of common stock from the exercise of stock options.

Our future liquidity and capital requirements will depend upon many factors, including, among others:

resources devoted to sales, marketing and distribution capabilities;

the rate of product adoption by physicians and patients;

the insurance payer community’s acceptance of and reimbursement for OVA1;

our plans to acquire or invest in other products, technologies and businesses; and

the market price of our common stock.

We had significant net operating loss (“NOL”) credit carryforwards as of June 30, 2014 for which a full valuation allowance has been provided due to our history of operating losses. Our ability to use our net NOL credit carryforwards may be restricted due to ownership change limitations occurring in the past or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. These ownership changes may also limit the amount of NOL credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

Off-Balance Sheet Arrangements

As of June 30, 2014, we had no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

Item 3 .

Quantitative and Qualitative Disclosures About Market Risk

Per Item 305(e) of Regulation S-K, information is not required.

Item 4 .

Controls and Procedures

Evaluation of disclosure controls and procedures.

Our senior management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management, including our Chief Executive Officer and Chief Accounting Officer, performed an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2014 . Based on this evaluation, our Chief Executive Officer and Chief Accounting Officer have concluded that as of June 30 2014 , our disclosure controls and procedures were effective.

Changes in internal controls over financial reporting.

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1 .

Legal Proceedings

In the ordinary course of business, we may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities. The results of litigation and claims cannot be predicted with certainty, and unfavorable resolutions are possible and could materially adversely affect our results of operations, cash flows or financial position. In addition, regardless of the outcome, litigation could have an adverse impact on us because of defense costs, diversion of management resources and other factors. While the outcome of these proceedings and claims cannot be predicted with certainty, there are no matters, as of June 30, 2014, that, in the opinion of management, will have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A .

Risk Factors

There have been no material changes to our risk factors previously disclosed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10 K for the year ended December 31, 2013 except for those risk factors disclosed under “Risk Factors” in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 , which are hereby incorporated herein by reference .

Item 6 . Exhibits

(a) The following exhibits are filed or incorporated by reference with this report as indicated below:

Exhibit

Incorporated by Reference

Filed

Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Herewith

3.1

Fourth Amended and Restated Certificate of Incorporation of Vermillion, Inc. dated January 22, 2010

8-K

000-31617

3.1

January 25, 2010

3.2

Certificate of Amendment of Fo u rth Amended and Restated Certificate of Incorporation , effective June 19, 2014


3.3	Fifth Amended and Restated Bylaws of Vermillion, Inc., effective June 19, 2014
10.1	Amended and Restated Employment Agreement between Vermillion, Inc. and James T. LaFrance effective as of April 23, 2014#
10.2	Separation Agreement and Release between Thomas J. McLain and Vermillion, Inc. effective April 23, 2014#
31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)	(1)
101	Interactive Data Files


(1)	Furnished herewith

#	Management contracts or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Vermillion, Inc.
Date: August 14, 2014	/s/ James T. LaFrance
	James T. LaFrance President and Chief Executive Officer (Principal Executive Officer)
Date: August 14, 2014	/s/ Eric J. Schoen
	Eric J. Schoen Vice President, Finance and Chief Accounting Officer (Principal Financial Officer)

EXHIBITS

Exhibit

Incorporated by Reference

Filed

Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Herewith

3.1

Fourth Amended and Restated Certificate of Incorporation of Vermillion, Inc. dated January 22, 2010

8-K

000-31617

3.1

January 25, 2010

3.2

Certificate of Amendment of Fourth Amended and Restated Certificate of Incorporation , effective June 19, 2014


3.3	Fifth Amended and Restated Bylaws of Vermillion, Inc., effective June 19, 2014
10.1	Amended and Restated Employment Agreement between Vermillion, Inc. and James T. LaFrance effective as of April 23, 2014#
10.2	Separation Agreement and Release between Thomas J. McLain and Vermillion, Inc. effective April 23, 2014#
31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	(1)
101	Interactive Data Files


(1)	Furnished herewith

#	Management contracts or compensatory plan or arrangement.

E xhibit 3 .2

CERTIFICATE OF AMENDMENT

FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

VERMILLION, INC.

Vermillion, Inc. (the “ Corporation ”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, hereby certifies as follows:

1. This Certificate of Amendment amends the provisions of the Corporation’s Fourth Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on January 22, 2010 (the “ Certificate of Incorporation ”).

2. Article IX of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:

ARTICLE IX

Holders of stock of any class or series of the corporation shall not be entitled to cumulate their votes for the election of directors or any other matter submitted to a vote of the stockholders, unless such cumulative voting is required pursuant to Sections 214 of the Delaware General Corporation Law, in which event each such holder shall be entitled to as many votes as shall equal the number of votes which (except for this provision as to cumulative voting) such holder would be entitled to cast for the election of directors with respect to his shares of stock multiplied by the number of directors to be elected by him, and the holder may cast all of such votes for a single director or may distribute them among the number of directors to be voted for, or for any two or more of them as such holder may see fit, so long as the name of the candidate for director shall have been placed in nomination prior to the voting and the stockholder, or any other holder of the same class or series of stock, has given notice at the meeting prior to the voting of the intention to cumulate votes.

1. NUMBER OF DIRECTORS. The number of directors that constitutes the whole Board of Directors of the corporation shall be designated in the Amended and Restated Bylaws of the corporation. Each director elected at and after the annual meeting of stockholders of 2014 shall be elected for a term expiring at the next succeeding annual meeting of stockholders and until such director’s successor shall have been elected and qualified, or until such director’s earlier death, resignation or removal. For the avoidance of doubt, any director elected at or prior to the annual meeting of stockholders of 2013 shall serve for the remainder of the term to which such director was elected or until such director’s earlier death, resignation or removal.

2. ELECTION OF DIRECTORS. Elections of directors need not be by written ballot unless the Amended and Restated Bylaws of the corporation shall so provide.

3. REMOVAL OF DIRECTORS. Any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.

3. This amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

4. All other provisions of the Certificate of Incorporation shall remain in full force and effect.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed this 27th day of June 2014.

By: /s/ Eric Schoen

Name: Eric Schoen

Title: Secretary

E xhibit 3.3

FIFTH AMENDED AND RESTATED BYLAWS

VERMILLION, INC.

TABLE OF CONTENTS



		Page

ARTICLE I	CORPORATE OFFICES		1

1.1	REGISTERED OFFICE		1

1.2	OTHER OFFICES		1

ARTICLE II	MEETINGS OF STOCKHOLDERS		1

2.1	PLACE OF MEETINGS		1

2.2	ANNUAL MEETING		1

2.3	SPECIAL MEETING		2

2.4	NOTICE OF STOCKHOLDERS’ MEETINGS		2

2.5	MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE		2

2.6	QUORUM		2

2.7	ADJOURNED MEETING; NOTICE		2

2.8	VOTING		3

2.9	WAIVER OF NOTICE		3

2.10	RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS		3

2.11	PROXIES		4

2.12	LIST OF STOCKHOLDERS ENTITLED TO VOTE		4

2.13	ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS		4

2.14	ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS		8

ARTICLE III	DIRECTORS		11

3.1	POWERS		11

3.2	NUMBER OF DIRECTORS		11

3.3	ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS	11

3.4	RESIGNATION AND VACANCIES	12

3.5	PLACE OF MEETINGS; MEETINGS BY TELEPHONE	12

3.6	FIRST MEETINGS	13


3.7	REGULAR MEETINGS	13

3.8	SPECIAL MEETINGS; NOTICE	13

3.9	QUORUM	13

3.10	WAIVER OF NOTICE	13

3.11	ADJOURNED MEETING; NOTICE	14

3.12	BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING	14

3.13	FEES AND COMPENSATION OF DIRECTORS	14

3.14	APPROVAL OF LOANS TO OFFICERS	14

3.15	REMOVAL OF DIRECTORS	14

ARTICLE IV	COMMITTEES	15

4.1	COMMITTEES OF DIRECTORS	15

4.2	COMMITTEE MINUTES	15

4.3	MEETINGS AND ACTION OF COMMITTEES	16

ARTICLE V	OFFICERS	16

5.1	OFFICERS	16

5.2	ELECTION OF OFFICERS	16

5.3	SUBORDINATE OFFICERS	16

5.4	REMOVAL AND RESIGNATION OF OFFICERS	16

5.5	VACANCIES IN OFFICES	17

5.6	CHAIRMAN OF THE BOARD	17

5.7	PRESIDENT	17

5.8	VICE PRESIDENT	17

5.9	SECRETARY	18

5.10	TREASURER	18

5.11	ASSISTANT SECRETARY	18

5.12	ASSISTANT TREASURER	19

5.13	AUTHORITY AND DUTIES OF OFFICERS	19

ARTICLE VI	INDEMNITY	19


6.1	INDEMNIFICATION OF DIRECTORS AND OFFICERS	19

6.2	INDEMNIFICATION OF OTHERS	19

6.3	INSURANCE	20

ARTICLE VII	RECORDS AND REPORTS	20

7.1	MAINTENANCE AND INSPECTION OF RECORDS	20

7.2	INSPECTION BY DIRECTORS	21

7.3	ANNUAL STATEMENT TO STOCKHOLDERS	21

7.4	REPRESENTATION OF SHARES OF OTHER CORPORATIONS	21

ARTICLE VIII	GENERAL MATTERS	21

8.1	CHECKS	21

8.2	EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS	21

8.3	STOCK CERTIFICATES; PARTLY PAID SHARES	22

8.4	SPECIAL DESIGNATION ON CERTIFICATES	22

8.5	LOST CERTIFICATES	23

8.6	CONSTRUCTION; DEFINITIONS	23

8.7	DIVIDENDS	23

8.8	FISCAL YEAR	23

8.9	SEAL	23

8.10	TRANSFER OF STOCK	23

8.11	STOCK TRANSFER AGREEMENTS	24

8.12	REGISTERED STOCKHOLDERS	24

ARTICLE IX	AMENDMENTS	24

ARTICLE X	DISSOLUTION	24

FIFTH AMENDED AND RESTATED BYLAWS

VERMILLION, INC.

ARTICLE I

CORPORATE OFFICES

1.1 REGISTERED OFFICE

The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent of the corporation at such location is Corporation Trust Company.

1.2 OTHER OFFICES

The board of directors may at any time establish other offices at any place or places where the corporation is qualified to do business.

ARTICLE II

MEETINGS OF STOCKHOLDERS

2.1 PLACE OF MEETINGS

Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the board of directors. In the absence of any such designation, stockholders’ meetings shall be held at the registered office of the corporation.

2.2 ANNUAL MEETING

The annual meeting of stockholders shall be held each year on a date and at a time designated by the board of directors. In the absence of such designation, the annual meeting of stockholders shall be held on the Second Tuesday of May in each year at 10:00 a.m. However, if such day falls on a legal holiday, then the meeting shall be held at the same time and place on the next succeeding full business day. At the meeting, directors shall be elected and any other proper business may be transacted.

2.3 SPECIAL MEETING

A special meeting of the stockholders may be called, at any time for any purpose or purposes, by the board of directors.

2.4 NOTICE OF STOCKHOLDERS’ MEETINGS

All notices of meetings with stockholders shall be in writing and shall be sent or otherwise given in accordance with Section 2.5 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, date, and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE

Written notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation. An affidavit of the secretary or an assistant secretary or of the transfer agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

2.6 QUORUM

The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.

2.7 ADJOURNED MEETING; NOTICE

When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

2.8 VOTING

The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements).

Except as may be otherwise provided in the Certificate of Incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder.

2.9 WAIVER OF NOTICE

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by the certificate of incorporation or these bylaws.

2.10 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS

In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action.

If the board of directors does not so fix a record date:

(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

(b) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action by the board of directors is necessary, shall be the day on which the first written consent is expressed.

(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

2.11 PROXIES

Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action may authorize another person or persons to act for him by a written proxy, signed by the stockholder and filed with the secretary of the corporation, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy shall be deemed signed if the stockholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder’s attorney-in-fact. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the General Corporation Law of Delaware.

2.12 LIST OF STOCKHOLDERS ENTITLED TO VOTE

The officer who has charge of the stock ledger of a corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

2.13 ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS

(a) At an annual meeting or at a special meeting of the stockholders, only such business shall be conducted as shall have been properly brought before such meeting. To be properly brought before a meeting, business must be (i) brought before the meeting by the corporation and specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors or any committee thereof, (ii) brought before the meeting by or at the direction of the board of directors or any committee thereof, or (iii) otherwise properly brought before the meeting by a stockholder who (A) was a stockholder of record (and, with respect to any beneficial owner, if different from such stockholder of record, on whose behalf such business is proposed, only if such beneficial owner was the beneficial owner of shares of the corporation) both at the time of giving the notice provided for in this Section 2.13 and at the time of the meeting, (B) is entitled to vote at the meeting, and (C) has complied with this Section 2.13 as to such business. Except for proposals properly made in accordance with Rule 14a-8 (or any successor thereto) under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the “ Exchange Act ”), and included in the notice of meeting given by or at the direction of the board of directors, the foregoing clause (iii) shall be the exclusive means for a stockholder to propose business to be brought before a meeting of the stockholders. Stockholders seeking to nominate a person or persons for election to the board of directors must comply with Section 2.14, and this Section 2.13 shall not be applicable to nominations except as expressly provided in Section 2.14.

(b) Without qualification, for business to be properly brought before a meeting by a stockholder, the stockholder must (i) provide Timely Notice (as defined below) thereof in writing and in proper form (as provided for in Section 2.13(c)) to the secretary of the corporation and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.13. To be timely, a stockholder’s notice must be delivered to, or

mailed and received at, the principal executive offices of the corporation either, as applicable (such notice within the following time periods, “ Timely Notice ”):

(1) for an annual meeting, not earlier than the one hundred twentieth (120th) day nor later than the ninetieth (90th) day prior to the one-year anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, on or before the later of (x) the ninetieth (90th) day prior to such annual meeting or (y) the tenth (10th) day following the date on which Public Disclosure (as defined below) of the date of such annual meeting was first made, or

(2) for a special meeting, not earlier than the one hundred twentieth (120th) day nor later than the ninetieth (90th) day prior to such special meeting or, if later, the tenth (10th) day following the date on which Public Disclosure of the date of such special meeting was first made.

In no event shall any adjournment or postponement of an annual meeting or of a special meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of Timely Notice as described above.

(i) As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the corporation’s books and records) and (B) the class or series and number of shares of the corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of the corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as “ Stockholder Information ”);

(ii) As to each Proposing Person, (A) any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to give such Proposing Person economic risk similar to ownership of shares of any class or series of the corporation, including due to the fact that the value of such derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any shares of any class or series of the corporation, or which derivative, swap or other transaction or series of transactions provides, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of any class or series of the corporation (any such derivative, swap or other transaction or series of transactions as described in this clause (A) is referred to as a “ Synthetic Equity Interest ”), all of which Synthetic Equity Interests shall be disclosed without regard to whether (x) any such Synthetic Equity Interest conveys any voting rights in shares of any class or series of the corporation to such Proposing Person, (y) any such Synthetic Equity Interest is required to be, or is capable of being, settled through delivery of shares of any class or series of the corporation or (z) such Proposing Person may have entered into other transactions that hedge or mitigate the economic effect of such Synthetic Equity Interest, (B) any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), agreement, arrangement, understanding or relationship pursuant to which such Proposing Person has or shares a right to vote any shares of any class or series of the corporation, (C) any agreement, arrangement, understanding or relationship, including any repurchase or similar stock borrowing agreement or arrangement, engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of the corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Proposing Person with respect to the shares of any class or series of the corporation, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the corporation (any such agreement, arrangement, understanding or relationship as described in this clause (C) is referred to as a “ Short Interest ”), (D) any rights to dividends on the shares of any class or series of the corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the corporation, (E) any performance related fees (other than an asset based fee) that such Proposing Person is entitled to based on any increase or decrease in the price or value of shares of any

class or series of the corporation, or any Synthetic Equity Interests or Short Interests, if any, and (F) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (A) through (F) are referred to as “ Disclosable Interests ”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these bylaws on behalf of a beneficial owner; and

(iii) As to each item of business that the stockholder proposes to bring before the meeting, (A) a reasonably brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration), and (C) a reasonably detailed description of all agreements, arrangements understandings and relationships (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other person, including the name of such other person, in connection with the proposal of such business by such stockholder.

For purposes of this Section 2.13, the term “ Proposing Person ” shall mean (i) the stockholder providing the notice of business proposed to be brought before a meeting, (ii) the beneficial owner or beneficial owners, if different from any Proposing Person pursuant to the foregoing clause (i), on whose behalf the notice of the business proposed to be brought before the meeting is made, (iii) any affiliate or associate (each within the meaning of Rule 12b-2 under the Exchange Act for purposes of these bylaws) of any Proposing Person pursuant to the foregoing clauses (i) or (ii), and (iv) any other person with whom any Proposing Person pursuant to the foregoing clauses (i), (ii) or (iii) is Acting in Concert (as defined below).

A person shall be deemed to be “ Acting in Concert ” with another person for purposes of these bylaws if such person knowingly acts (whether or not pursuant to an express agreement, arrangement or understanding) in concert with, or towards a common goal relating to the management, governance or control of the corporation in parallel with, such other person where (A) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making processes and (B) at least one additional factor suggests that such persons intend to act in concert or in parallel, which such additional factors may include, without limitation, exchanging information (whether publicly or privately), attending meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel; provided, however, that a person shall not be deemed to be Acting in Concert with any other person solely as a result of the solicitation or receipt of revocable proxies or consents from such other person in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a proxy or consent solicitation statement filed on Schedule 14A. A person Acting in Concert with another person shall be deemed to be Acting in Concert with any third party who is also Acting in Concert with such other person.

(d) A stockholder providing notice of business proposed to be brought before a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.13 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the secretary at the principal executive offices of the corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days, if practicable (or, if not practicable, on the first practicable date) prior to the date for the meeting or any adjournment or postponement thereof, in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.

(e) Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at a meeting except in accordance with this Section 2.13. The board of directors, chairman of the board, presiding officer of the meeting or president shall, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with this Section 2.13, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

(f) This Section 2.13 is expressly intended to apply to any business proposed to be brought before a meeting of stockholders regardless of whether (i) such proposal is made pursuant to Rule 14a-8 under the Exchange Act (or any successor thereto) or (ii) such business is already the subject of any notice to the stockholders or Public Disclosure from the board of directors. In addition to the requirements of this Section 2.13 with respect to any business proposed to be brought before a meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business; provided, however, that references in these bylaws to the Exchange Act, or the rules and regulations promulgated thereunder are not intended to and shall not limit the requirements of these bylaws applicable to nominations or proposals or any other business to be considered pursuant to these bylaws regardless of the stockholder’s intent to utilize Rule 14a-8 under the Exchange Act (or any successor thereto). Nothing in this Section 2.13 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor thereto).

(g) For purposes of these bylaws, “ Public Disclosure ” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

2.14 ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS

(a) Nominations of any person for election to the board of directors at an annual meeting or at a special meeting may be made at such meeting only (i) by or at the direction of the board of directors, including by any committee or persons appointed by the board of directors, or (ii) by a stockholder who (A) was a stockholder of record (and, with respect to any beneficial owner, if different from such stockholder of record, on whose behalf such nomination is proposed to be made, only if such beneficial owner was the beneficial owner of shares of the corporation) both at the time of giving the notice provided for in this Section 2.14 and at the time of the meeting, (B) is entitled to vote at the meeting, and (C) has complied with this Section 2.14 as to such nomination. The foregoing clause (ii) shall be the exclusive means for a stockholder to make any nomination of a person or persons for election to the board of directors at an annual meeting or at a special meeting.

(b) Without qualification, for a stockholder to make any nomination of a person or persons for election to the board of directors at an annual meeting or at a special meeting, the stockholder must (i) provide Timely Notice (as defined in Section 2.13) thereof in writing and in proper form (as set forth in Section 2.14(c)) to the secretary of the corporation at the principal executive offices of the corporation, and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.14. In no event shall any adjournment or postponement of an annual meeting or of a special meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 2.14(b).

(i) As to each Nominating Person (as defined below), the Stockholder Information (as defined in Section 2.13(c)(i), except that for purposes of this Section 2.14 the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.13(c)(i));

(ii) As to each Nominating Person, any Disclosable Interests (as defined in Section 2.13(c)(ii), except that for purposes of this Section 2.14 the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.13(c)(ii) and the disclosure in clause (F) of Section 2.13(c)(ii) shall be made with respect to the election of directors at the meeting);

(iii) As to each person whom a Nominating Person proposes to nominate for election as a director, (A) all information with respect to such proposed nominee that would be required to be set forth in a stockholder’s notice pursuant to this Section 2.14 if such proposed nominee were a Nominating Person, (B) all information relating to such proposed nominee that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including but not limited to such proposed nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and (C) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among any Nominating

Person, on the one hand, and each proposed nominee, such proposed nominee’s respective affiliates and associates, and any other persons with whom such proposed nominee (or any of such proposed nominee’s respective affiliates or associates) is Acting in Concert, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the “registrant” for purposes of such rule and the proposed nominee were a director or executive officer of such registrant; and

(iv) If required by the corporation, as to any proposed nominee, such other information (A) as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as an independent director of the corporation or (B) that could be material to a reasonable stockholder’s understanding of the independence or lack of independence of such proposed nominee.

For purposes of this Section 2.14, the term “ Nominating Person ” shall mean (i) the stockholder providing the notice of the nomination proposed to be made at the meeting, (ii) the beneficial owner or beneficial owners, if different from any Nominating Person pursuant to the foregoing clause (i), on whose behalf the notice of the nomination proposed to be made at the meeting is made, (iii) any affiliate or associate of any Nominating Person pursuant to the foregoing clauses (i) or (ii), and (iv) any other person with whom any Nominating Person pursuant to the foregoing clauses (i), (ii), or (iii) is Acting in Concert.

(d) A stockholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.14 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the secretary at the principal executive offices of the corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days, if practicable (or, if not practicable, on the first practicable date) prior to the date for the meeting or any adjournment or postponement thereof, in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.

(e) Notwithstanding anything in these bylaws to the contrary, no person shall be eligible for election as a director of the corporation unless nominated in accordance with this Section 2.14. The board of directors, chairman of the board, presiding officer of the meeting or president shall, if the facts warrant, determine that a nomination was not properly made in accordance with this Section 2.14, and if he or she should so determine, he or she shall so declare such determination to the meeting and any such nomination not properly made shall be disregarded.

(f) This Section 2.14 is expressly intended to apply to any nomination proposed to be made at an annual or special meeting of stockholders regardless of whether the election of directors is already the subject of any notice to the stockholders or Public Disclosure from the board of directors. In addition to the requirements of this Section 2.14 with respect to any nomination proposed to be made at a meeting, each Nominating Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations; provided, however, that references in these bylaws to the Exchange Act, or the rules and regulations promulgated thereunder are not intended to and shall not limit the requirements of these bylaws applicable to nominations or proposals or any other business to be considered pursuant to these bylaws regardless of the stockholder’s intent to utilize Rule 14a-8 under the Exchange Act (or any successor thereto). Nothing in this Section 2.14 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor thereto).

ARTICLE III

DIRECTORS

3.1 POWERS

Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors.

3.2 NUMBER OF DIRECTORS

The board of directors shall consist of eight (8) members. The number of directors may be changed by an amendment to this bylaw, duly adopted by the board of directors or by the stockholders, or by a duly adopted amendment to the certificate of incorporation. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.

3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS

Except as provided in Section 3.4 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his successor is elected and qualified or until his earlier resignation or removal.

Elections of directors need not be by written ballot.

3.4 RESIGNATION AND VACANCIES

Any director may resign at any time upon written notice to the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.

Unless otherwise provided in the certificate of incorporation or these bylaws:

(a) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

(b) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.

If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware.

If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten (10) percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable.

3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE

The board of directors of the corporation may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of

directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

3.6 FIRST MEETINGS

The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting need be given to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

3.7 REGULAR MEETINGS

Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

3.8 SPECIAL MEETINGS; NOTICE

Special meetings of the board may be called by the president on 48 hours’ notice to each director, either personally or by mail, telegram, telex, or telephone; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two (2) directors unless the board consists of only one (1) director, in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

3.9 QUORUM

At all meetings of the board of directors, a majority of the authorized number of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

3.10 WAIVER OF NOTICE

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice unless so required by the certificate of incorporation or these bylaws.

3.11 ADJOURNED MEETING; NOTICE

If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING

Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the board or committee.

3.13 FEES AND COMPENSATION OF DIRECTORS

Unless otherwise restricted by the certificate of incorporation or these bylaws, the board of directors shall have the authority to fix the compensation of directors.

3.14 APPROVAL OF LOANS TO OFFICERS

The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing contained in this section shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

3.15 REMOVAL OF DIRECTORS

Unless otherwise restricted by statute, by the certificate of incorporation or by these bylaws, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.

ARTICLE IV

COMMITTEES

4.1 COMMITTEES OF DIRECTORS

The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, with each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors or in the bylaws of the corporation, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) amend the certificate of incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) of the General Corporation Law of Delaware, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation), (ii) adopt an agreement of merger or consolidation under Sections 251 or 252 of the General Corporation Law of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, (iv) recommend to the stockholders a dissolution of the corporation or a revocation of a dissolution, or (v) amend the bylaws of the corporation; and, unless the board resolution establishing the committee, the bylaws or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of Delaware.

4.2 COMMITTEE MINUTES

Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

4.3 MEETINGS AND ACTION OF COMMITTEES

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Section 3.5 (place of meetings and meetings by telephone), Section 3.7 (regular meetings), Section 3.8 (special meetings and notice), Section 3.9 (quorum), Section 3.10 (waiver of notice), Section 3.11 (adjournment and notice of adjournment), and Section 3.12 (action without a meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members; provided, however, that the time of regular meetings of committees may also be called by resolution of the board of directors and that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The board of directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.

ARTICLE V

OFFICERS

5.1 OFFICERS

The officers of the corporation shall be a president, one or more vice presidents, a secretary, and a treasurer. The corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more assistant vice presidents, assistant secretaries, assistant treasurers, and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws. Any number of offices may be held by the same person.

5.2 ELECTION OF OFFICERS

The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 or 5.5 of these bylaws, shall be chosen by the board of directors, subject to the rights, if any, of an officer under any contract of employment.

5.3 SUBORDINATE OFFICERS

The board of directors may appoint, or empower the president to appoint, such other officers and agents as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the board of directors may from time to time determine.

5.4 REMOVAL AND RESIGNATION OF OFFICERS

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the board of directors at any regular or special meeting of the board or, except in the case of an officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors.

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

5.5 VACANCIES IN OFFICES

Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

5.6 CHAIRMAN OF THE BOARD

The chairman of the board, if such an officer be elected, shall, if present, preside at meetings of the board of directors and exercise and perform such other powers and duties as may from time to time be assigned to him by the board of directors or as may be prescribed by these bylaws. If there is no president, then the chairman of the board shall also be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 5.7 of these bylaws.

5.7 PRESIDENT

Subject to such supervisory powers, if any, as may be given by the board of directors to the chairman of the board, if there be such an officer, the president shall be the chief executive officer of the corporation and shall, subject to the control of the board of directors, have general supervision, direction, and control of the business and the officers of the corporation. He shall preside at all meetings of the stockholders and, in the absence or nonexistence of a chairman of the board, at all meetings of the board of directors. He shall have the general powers and duties of management usually vested in the office of president of a corporation and shall have such other powers and duties as may be prescribed by the board of directors or these bylaws.

5.8 VICE PRESIDENT

In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors, these bylaws, the president or the chairman of the board.

5.9 SECRETARY

The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the board of directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show the time and place of each meeting, whether regular or special (and, if special, how authorized and the notice given), the names of those present at directors’ meetings or committee meetings, the number of shares present or represented at stockholders’ meetings, and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation’s transfer agent or registrar, as determined by resolution of the board of directors, a share register, or a duplicate share register, showing the names of all stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation.

The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the board of directors required to be given by law or by these bylaws. He shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the board of directors or by these bylaws.

5.10 TREASURER

The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall at all reasonable times be open to inspection, by any director.

The treasurer shall deposit all money and other valuables in the name and to the credit of the corporation with such depositaries as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the board of directors or these bylaws.

5.11 ASSISTANT SECRETARY

The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the stockholders or board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors or the stockholders may from time to time prescribe.

5.12 ASSISTANT TREASURER

The assistant treasurer, or, if there is more than one, the assistant treasurers, in the order determined by the stockholders or board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors or the stockholders may from time to time prescribe.

5.13 AUTHORITY AND DUTIES OF OFFICERS

In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the board of directors or the stockholders.

ARTICLE VI

INDEMNITY

6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS

The corporation shall, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, indemnify each of its directors and officers against expenses (including attorneys’ fees), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.1, a “director” or “officer” of the corporation includes any person (i) who is or was a director or officer of the corporation, (ii) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

6.2 INDEMNIFICATION OF OTHERS

The corporation shall have the power, to the extent and in the manner permitted by the General Corporation Law of Delaware, to indemnify each of its employees and agents (other than directors and officers) against expenses (including attorneys’ fees), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.2, an “employee” or “agent” of the corporation (other than a director or officer) includes any person (i) who is or was an employee or agent of the corporation, (ii) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

6.3 INSURANCE

The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of the General Corporation Law of Delaware.

ARTICLE VII

RECORDS AND REPORTS

7.1 MAINTENANCE AND INSPECTION OF RECORDS

The corporation shall, either at its principal executive office or at such place or places as designated by the board of directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books, and other records.

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal place of business.

7.2 INSPECTION BY DIRECTORS

Any director shall have the right to examine the corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.

7.3 ANNUAL STATEMENT TO STOCKHOLDERS

The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS

The chairman of the board, the president, any vice president, the treasurer, the secretary or assistant secretary of this corporation, or any other person authorized by the board of directors or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

ARTICLE VIII

GENERAL MATTERS

8.1 CHECKS

From time to time, the board of directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.

8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS

The board of directors, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the board of directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

8.3 STOCK CERTIFICATES; PARTLY PAID SHARES

The shares of a corporation shall be represented by certificates, provided that the board of directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the board of directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice-chairman of the board of directors, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

8.4 SPECIAL DESIGNATION ON CERTIFICATES

If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

8.5 LOST CERTIFICATES

Except as provided in this Section 8.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

8.6 CONSTRUCTION; DEFINITIONS

Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Delaware General Corporation Law shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a natural person and a legally created entity, such as but not limited to a corporation.

8.7 DIVIDENDS

The directors of the corporation, subject to any restrictions contained in the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock pursuant to the General Corporation Law of Delaware. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock.

The directors of the corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies.

8.8 FISCAL YEAR

The fiscal year of the corporation shall be fixed by resolution of the board of directors and may be changed by the board of directors.

8.9 SEAL

The seal of the corporation shall be such as from time to time may be approved by the board of directors.

8.10 TRANSFER OF STOCK

Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.

8.11 STOCK TRANSFER AGREEMENTS

The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Delaware.

8.12 REGISTERED STOCKHOLDERS

The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE IX

AMENDMENTS

The original or other bylaws of the corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.

ARTICLE X

DISSOLUTION

If it should be deemed advisable in the judgment of the board of directors of the corporation that the corporation should be dissolved, the board, after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, shall cause notice to be mailed to each stockholder entitled to vote thereon of the adoption of the resolution and of a meeting of stockholders to take action upon the resolution.

At the meeting a vote shall be taken for and against the proposed dissolution. If a majority of the outstanding stock of the corporation, entitled to vote thereon votes for the proposed dissolution, then a certificate stating that the dissolution has been authorized in accordance with the provisions of Section 275 of the General Corporation Law of Delaware and setting forth the names and residences of the directors and officers shall be executed, acknowledged, and filed and shall become effective in accordance with Section 103 of the General Corporation Law of Delaware. Upon such certificate’s becoming effective in accordance with Section 103 of the General Corporation Law of Delaware, the corporation shall be dissolved.

Whenever all the stockholders entitled to vote on a dissolution consent in writing, either in person or by duly authorized attorney, to a dissolution, no meeting of directors or stockholders shall be necessary. The consent shall be filed and shall become effective in accordance with Section 103 of the General Corporation Law of Delaware. Upon such consent’s becoming effective in accordance with Section 103 of the General Corporation Law of Delaware, the corporation shall be dissolved. If the consent is signed by an attorney, then the original power of attorney or a photocopy thereof shall be attached to and filed with the consent. The consent filed with the Secretary of State shall have attached to it the affidavit of the secretary or some other officer of the corporation stating that the consent has been signed by or on behalf of all the stockholders entitled to vote on a dissolution; in addition, there shall be attached to the consent a certification by the secretary or some other officer of the corporation setting forth the names and residences of the directors and officers of the corporation.

ARTICLE XI

CUSTODIAN

11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES

The Court of Chancery, upon application of any stockholder, may appoint one or more persons to be custodians and, if the corporation is insolvent, to be receivers, of and for the corporation when:

(a) at any meeting held for the election of directors the stockholders are so divided that they have failed to elect successors to directors whose terms have expired or would have expired upon qualification of their successors; or

(b) the business of the corporation is suffering or is threatened with irreparable injury because the directors are so divided respecting the management of the affairs of the corporation that the required vote for action by the board of directors cannot be obtained and the stockholders are unable to terminate this division; or

(c) the corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets.

11.2 DUTIES OF CUSTODIAN

The custodian shall have all the powers and title of a receiver appointed under Section 291 of the General Corporation Law of Delaware, but the authority of the custodian shall be to continue the business of the corporation and not to liquidate its affairs and distribute its assets, except when the Court of Chancery otherwise orders and except in cases arising under Sections 226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware.

E xhibit 10.1

EMPLOYMENT AGREEMENT
(As Amended and Restated, Effective as of April 23, 2014)

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) between Vermillion, Inc., a Delaware corporation (the “ Company ”), and James T. LaFrance (“ Executive ,” and together with the Company, the “ Parties ”) was initially effective as of April 23, 2014 (the “ Effective Date ”).

WHEREAS, the Parties mutually desire to enter into this amended and restated Agreement on July 23, 2014 (the “ Restatement Date ”), to be effective retroactively as of the Effective Date, in order to reduce the number of shares subject to the stock option granted to Executive on the Effective Date, to provide for a special cash bonus that vests over time and to increase Executive’s base salary.

NOW, THEREFORE, the Parties agree as follows:

1. Position .

(a) The Company will employ Executive as its President and Chief Executive Officer and, subject to Section 1(b) below, Executive shall continue to serve as Chairman of the Company’s Board of Directors. In these positions, Executive will be expected to devote Executive’s full business time, attention and energies to the performance of Executive’s duties with the Company. Executive may devote time to outside board or advisory positions as pre-approved by the Company’s Board of Directors. Executive will render such business and professional services in the performance of such duties, consistent with Executive’s positions within the Company, as shall be reasonably assigned to Executive by the Company’s Board of Directors. Executive may perform his duties and responsibilities principally from Farmington, Connecticut, but will travel as needed, including to Austin, Texas and to collaborator and partner locations, academic medical centers, banking and other conferences, and other locations as necessary or advisable in performance of Executive’s duties.

(b) At each annual meeting of the Company’s stockholders that occurs during the period of Executive’s employment hereunder at which Executive’s term as a member of the Company’s Board of Directors expires, the Company shall nominate Executive to serve as a member of the Company’s Board of Directors, with such service subject to any required shareholder approval.

2. Compensation .

(a) The Company will pay Executive a base salary of at least $375,000 on an annualized basis, payable in accordance with the Company’s standard payroll policies, including compliance with applicable tax withholding requirements; provided that any such base salary that was earned on or after the Effective Date, but has not been paid prior to the Restatement Date, shall be paid on the first payroll date following the Restatement Date.

(b) Executive will be eligible for a bonus of up to fifty percent (50%) of Executive’s base salary (prorated for partial years) for achievement of reasonable Company and individual performance-related goals to be defined by the Company’s Board of Directors. The exact payment terms of a bonus, if any, are to be set by the Compensation Committee of the Board of Directors in its sole discretion. Any such bonus will be payable to Executive within 2½ months after the last day of the applicable performance period, except to the extent payment is deferred pursuant to a deferral plan adopted by the Company.

(c) Executive shall be eligible for a special cash bonus in the aggregate amount of $103,000, which shall vest in four equal annual installments of $25,750 on each of the Restatement Date, April 23, 2015, April 23, 2016 and April 23, 2017, provided that Executive remains in continuous service with the Company through the applicable vesting date. Each such installment that becomes vested shall be paid to Executive within 30 days after the applicable vesting date.

(d) On the Effective Date, the Company granted to Executive a stock option award with respect to 800,000 shares of common stock of the Company, subject to the terms and conditions of the Company’s Amended and Restated 2010 Stock Incentive Plan (the “ Stock Incentive Plan ”) and a stock option award agreement in a form

substantially similar to that used by the Company for other senior executives of the Company (the “ Option ”). The Option is hereby rescinded and forfeited with respect to 451,500 shares of common stock of the Company, such that an aggregate of 348,500 shares of common stock of the Company shall remain subject to the Option. Except for the reduction in the number of shares subject to the Option, as provided herein, the Option shall continue to be subject to the same terms and conditions as in effect on the date of grant, including the following terms and conditions. The Option shall be granted as an incentive stock option to the maximum extent possible in accordance with the limitations set forth in Section 422 of the Internal Revenue Code, and the remainder of the Option shall be granted as a nonqualified stock option. The Option shall have a per share exercise price equal to the closing price of a share of common stock of the Company as of the date of grant and, except as otherwise provided in the Stock Incentive Plan or the stock option award agreement, 1/48 th of the shares subject to the Option shall become vested and exercisable on each monthly anniversary of the date of grant over a period of 48 consecutive months after the date of grant, subject to Executive’s continued employment with the Company through each such anniversary date. To the extent the Option is vested and exercisable as of the date of Executive’s termination of employment, the Option shall remain exercisable for the period prescribed by the terms of the stock option award agreement; provided that if Executive’s employment is terminated by the Company without Cause or Executive resigns for Good Reason, as such terms are defined below, the Option shall remain exercisable until the earliest to occur of (i) the 12-month anniversary of the date of Executive’s termination of employment, (ii) the date on which the Options would have expired if Executive’s employment had continued through the full term of the Option and (iii) the date on which Executive breaches this Agreement, the PIIA or any other agreement between Executive and the Company or any of its affiliates.

3. Benefits . During the term of Executive’s employment, Executive will be entitled to the Company’s standard benefits covering employees at Executive’s level, including (i) the Company’s group health, life, short- and long-term disability, 401(k) and other employee benefit plans, as such plans may be in effect from time to time, subject to the Company’s right to cancel or change the benefit plans and programs it offers to its employees at any time, and (ii) not less than twenty (20) days of paid time off per full calendar year (prorated for partial years), in addition to standard holidays, in accordance with the Company’s policies in effect from time to time.

4. At-Will Employment . Executive’s employment with the Company is for an unspecified duration and constitutes “at will” employment. This employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or Executive, with or without notice.

5. Termination without Cause or for Good Reason . In the event that the Company terminates Executive’s employment for reasons other than for Cause (as defined below) or Executive terminates his employment for Good Reason (as defined below) at any time following the Effective Date, and provided that Executive signs and does not revoke a standard separation agreement releasing all claims against the Company, in a form reasonably satisfactory to the Company, does not breach any provision of this Agreement (including but not limited to Section 10, Section 11 and Section 12 hereof), and continues to comply with the PIIA, as hereinafter defined, Executive shall be entitled to receive, subject to Section 14 below:

(i) continued payment of Executive’s base salary as then in effect for a period of twelve (12) months following the date of termination (the “ Severance Period ”), to be paid periodically in accordance with the Company’s standard payroll practices, provided that Executive shall immediately repay to the Company any amounts that he receives hereunder if within sixty (60) days following termination of his employment he either has failed to execute the standard release described above or has revoked the general release after he executes it; and

(ii) continuation of Company health and dental benefits through COBRA premiums paid by the Company directly to the COBRA administrator during the Severance Period; provided, however, that such premium payments shall cease prior to the end of the Severance Period if Executive commences other employment with reasonably comparable or greater health and dental benefits.

Executive will not be eligible for any bonus or other benefits not described above after termination, except as may be required by law.

6. Termination After Change of Control . If Executive’s employment is terminated by the Company for reasons other than for Cause (as defined below) or by Executive for Good Reason (as defined below) within the twelve (12) month period following a Change of Control (as defined below), then, in addition to the severance obligations due to

Executive under Section 5 above, one-hundred percent (100%) of any then-unvested shares under Company stock options then held by Executive will vest upon the date of such termination and the period of time for their exercise will be at the discretion of the Company, provided that no option shall be exercisable after expiration of its original term. It may very well be necessary for the Executive to exercise such shares on the day of such Change in Control, and the Company shall use its best efforts to provide Executive with a reasonable period of advance written notice in such event.

7. Definitions . For purposes of this Agreement:

(a) “ Cause ” means termination of employment by reason of Executive’s:

(i) material breach of this Agreement, the Proprietary Information and Inventions Agreement entered into between Executive and the Company (the “ PIIA ”) or any other confidentiality, invention assignment or similar agreement with the Company;

(ii) repeated negligence in the performance of duties or nonperformance or misperformance of such duties that in the good faith judgment of the Board of Directors of the Company adversely affects the operations or reputation of the Company;

(iii) refusal to abide by or comply with the good faith directives of the Company’s Board of Directors or the Company’s standard policies and procedures, which actions continue for a period of at least ten (10) days after written notice from the Company;

(iv) violation or breach of the Company’s Code of Ethics, Financial Information Integrity Policy, Insider Trading Compliance Program, or any other similar code or policy adopted by the Company and generally applicable to the Company’s employees, as then in effect;

(v) willful dishonesty, fraud, or misappropriation of funds or property with respect to the business or affairs of the Company;

(vi) conviction by or entry of a plea of guilty or nolo contendere, in a court of competent and final jurisdiction, for any crime which constitutes a felony in the jurisdiction involved; or

(vii) abuse of alcohol or drugs (legal or illegal) that, in the Board of Director’s reasonable judgment, materially impairs Executive’s ability to perform Executive’s duties.

(b) “ Change of Control ” means:

(i) after the date hereof, any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

(ii) the date of the consummation of a merger or consolidation of the Company with any other corporation or entity that has been approved by the stockholders of the Company, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or

(iii) the date of the consummation of the sale or disposition of all or substantially all of the Company’s assets.

(c) “ Good Reason ” means, the occurrence of any one or more of the following events, without Executive’s consent, which continues uncured for a period of not less than thirty (30) days following written notice given by Executive to the Company within thirty (30) days following the occurrence of such event:

(i) a material and adverse change in Executive’s title or duties (excluding any changes in such duties resulting from the Company becoming part of a larger entity pursuant to a Change of Control) or in Executive’s base salary; or

(ii) Executive being required to relocate to an office location more than fifty (50) miles from Executive’s current office in Farmington, Connecticut. Should Executive be required and agree to relocate from Executive’s current office in Farmington, Connecticut, all reasonable moving expenses to relocate Executive’s office and private residence shall be paid for and billed directly to Company, with all reimbursements being requested and made within one (1) year after being incurred.

In addition, Executive must actually terminate Executive’s employment with the Company within six (6) months following the initial existence of the condition described above in (i) and (ii) giving rise to Good Reason.

(d) “ Separation from Service ” or “ Separates from Service ” shall mean Executive’s termination of employment, as determined in accordance with Treas. Reg. § 1.409A-1(h). Executive shall be considered to have experienced a termination of employment when the facts and circumstances indicate that Executive and the Company reasonably anticipate that either (i) no further services will be performed for the Company after a certain date, or (ii) that the level of bona fide services Executive will perform for the Company after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed by Executive (whether as an employee or independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Company if Executive has been providing services to the Company for less than thirty-six (36) months). If Executive is on military leave, sick leave, or other bona fide leave of absence, the employment relationship between Executive and the Company shall be treated as continuing intact, provided that the period of such leave does not exceed six (6) months, or if longer, so long as Executive retains a right to reemployment with the Company under an applicable statute or by contract. If the period of a military leave, sick leave, or other bona fide leave of absence exceeds six (6) months and Executive does not retain a right to reemployment under an applicable statute or by contract, the employment relationship shall be considered to be terminated for purposes of this Agreement as of the first (1st) day immediately following the end of such six (6) month period. In applying the provisions of this Section, a leave of absence shall be considered a bona fide leave of absence only if there is a reasonable expectation that Executive will return to perform services for the Company.

8. Employment, Confidential Information and Invention Assignment Agreement . Executive understands and agrees that the Company and its affiliates have legitimate interests in protecting their goodwill, relationships with customers, and in maintaining their trade secrets and other proprietary and confidential information, which are valuable assets of the Company and its affiliates. As a condition of Executive’s employment, Executive shall complete, sign and return the Company’s standard form of PIIA. Executive acknowledges and agrees that the PIIA and the provisions of Sections 10-12 of this Agreement are necessary and appropriate to protect the Company’s and its affiliates’ legitimate interests and are narrowly tailored to provide such protection. Executive agrees and acknowledges that, in connection with Executive’s prior service to the Company, and his employment and unique relationship with the Company and its affiliates, Executive has had access to and become familiar with, and will continue to have access to and become familiar with, confidential and proprietary information and trade secrets belonging to the Company and its affiliates which Executive would not have otherwise had but for Executive’s employment with, or other service to, the Company or its affiliates.

9. Non Contravention . Executive represents to the Company that Executive’s signing of this Agreement, the PIIA, the issuance of stock options to Executive, and Executive’s commencement of employment with the Company does not violate any agreement Executive has with any of Executive’s previous employers and Executive’s signature confirms this representation.

10. Conflicting Employment . Executive agrees that, during the term of Executive’s employment with the Company and during the Severance Period, Executive will not engage in any other employment, occupation, consulting or other business activity competitive with or directly related to the business in which the Company is now involved or becomes involved during the term of Executive’s employment, nor will Executive engage in any other activities that conflict with Executive’s obligations to the Company. Executive acknowledges that compliance with the obligations of this Section is a condition to Executive’s right to receive the severance payments set forth in Section 5 above.

11. Nonsolicitation . From the Effective Date of this Agreement until twelve (12) months after the termination of this Agreement (the “ Restricted Period ”), Executive will not, directly or indirectly, solicit or encourage any employee or contractor of the Company or its affiliates to terminate employment with, or cease providing services to, the Company or its affiliates. During the Restricted Period, Executive will not, whether for Executive’s own account or

for the account of any other person, firm, corporation or other business organization, solicit or interfere with any person who is or during the period of Executive’s engagement by the Company was a collaborator, partner, licensor, licensee, vendor, supplier, customer or client of the Company or its affiliates to the Company’s detriment. Executive acknowledges that compliance with the obligations of this Section is a condition to Executive’s right to receive and retain the severance payments set forth in Section 5 above.

12. Nondisparagement . From the Effective Date of this Agreement and surviving any termination for any reason, Executive will not disparage or defame, whether orally or in writing, whether directly or indirectly, whether truthfully or falsely, and whether acting alone or through any other person, the Company or its affiliates or their respective current or former directors, officers, employees, agents, successors or assigns (both individually or in their official capacities with the Company or its affiliates). Executive acknowledges that compliance with the obligations of this Section is a condition to Executive’s right to receive and retain the severance payments set forth in Section 5 above.

13. Arbitration and Equitable Relief .

(a) In consideration of Executive’s employment with the Company, its promise to arbitrate all employment related disputes and Executive’s receipt of the compensation and other benefits paid to Executive by the Company, at present and in the future, EXECUTIVE AGREES THAT ANY AND ALL CONTROVERSIES, CLAIMS, OR DISPUTES WITH ANYONE (INCLUDING THE COMPANY AND ANY EMPLOYEE, OFFICER, DIRECTOR, STOCKHOLDER OR BENEFIT PLAN OF THE COMPANY IN THEIR CAPACITY AS SUCH OR OTHERWISE) ARISING OUT OF, RELATING TO, OR RESULTING FROM EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR THE TERMINATION OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, INCLUDING ANY BREACH OF THIS AGREEMENT, SHALL BE SUBJECT TO BINDING ARBITRATION UNDER THE ARBITRATION RULES SET FORTH IN TEXAS CIVIL PRACTICE AND REMEDY CODE SECTION 171.001 THROUGH SECTION 171.098 (THE “ RULES ”) AND PURSUANT TO TEXAS LAW. Disputes which Executive agrees to arbitrate, and thereby agree to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, and claims of harassment, discrimination or wrongful termination. Executive further understands that this agreement to arbitrate also applies to any disputes that the Company may have with Executive.

(b) Executive agrees that any arbitration will be administered by the American Arbitration Association (“ AAA ”) and that the neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes. Executive agrees that the arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and motions to dismiss and demurrers, prior to any arbitration hearing. Executive also agrees that the arbitrator shall have the power to award any remedies, including attorneys’ fees and costs, available under applicable law. Executive understands the Company will pay for any administrative or hearing fees charged by the arbitrator or AAA except that Executive shall pay the first $125.00 of any filing fees associated with any arbitration that Executive initiates. Executive agrees that the arbitrator shall administer and conduct any arbitration in a manner consistent with the Rules and that to the extent that the AAA’s National Rules for the Resolution of Employment Disputes conflict with the Rules, the Rules shall take precedence. Executive agrees that the decision of the arbitrator shall be in writing.

(c) Except as provided by the Rules and this Agreement, arbitration shall be the sole, exclusive and final remedy for any dispute between Executive and the Company. Accordingly, except as provided for by the Rules and this Agreement, neither Executive nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful company policy, and the arbitrator shall not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted.

(d) In addition to the right under the Rules to petition the court for provisional relief, Executive agrees that any party may also petition the court for injunctive relief where either party alleges or claims a violation of the PIIA between Executive and the Company or any other agreement regarding trade secrets, confidential information, nonsolicitation, nondisparagement or Labor Code §2870. Executive understands that any breach or threatened breach of such an agreement will cause irreparable injury and that money damages will not provide an adequate

remedy therefor and both parties hereby consent to the issuance of an injunction. In the event either party seeks injunctive relief, the prevailing party shall be entitled to recover reasonable costs and attorneys’ fees.

(e) Executive understands that this Agreement does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body such as the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission or the Workers’ Compensation Board. This Agreement does, however, preclude Executive from pursuing court action regarding any such claim.

(f) Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understand it, including that Executive is waiving Executive’s right to a jury trial. Finally, Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement.

14. Taxes . All payments made pursuant to this Agreement will be subject to withholding of applicable taxes. Notwithstanding the foregoing, Executive is solely responsible and liable for the satisfaction of any federal, state, province or local taxes that may arise with respect to this Agreement (including any taxes arising under Section 409A of the Internal Revenue Code (“ IRC ”). Neither the Company nor any of its employees, officers, directors, or service providers shall have any obligation whatsoever to pay such taxes, to prevent Executive from incurring them, or to mitigate or protect Executive from any such tax liabilities. Notwithstanding anything in this Agreement to the contrary, if any amounts that become due under this Agreement on account of Executive’s termination of employment constitute “nonqualified deferred compensation” within the meaning of IRC Section 409A, payment of such amounts shall not commence until Executive incurs a Separation from Service. If, at the time of Executive’s termination of employment under this Agreement, Executive is a “specified employee” (within the meaning of IRC Section 409A), any amounts that constitute “nonqualified deferred compensation” within the meaning of IRC Section 409A that become payable to Executive on account of Executive’s Separation from Service (including any amounts payable pursuant to the preceding sentence) will not be paid until after the end of the sixth (6th) calendar month beginning after Executive’s Separation from Service (the “ 409A Suspension Period ”). Within fourteen (14) calendar days after the end of the 409A Suspension Period, Executive shall be paid a lump sum payment in cash equal to any payments delayed because of the preceding sentence. Thereafter, Executive shall receive any remaining benefits as if there had not been an earlier delay. Each payment due under this Agreement is treated as a separate payment for purposes of Treasury Regulations Sections 1.409A-1(b)(4)(F) and 1.409A-2(b)(2).

15. Liability Insurance . To the extent that the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Executive shall be covered by such policies in such a manner as to provide to Executive the same rights and benefits as are provided to the most favorably insured of the Company’s officers.

16. Successors of the Company . The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company. This Agreement shall be assignable by the Company in the event of a merger or similar transaction in which the Company is not the surviving entity, or of a sale of all or substantially all of the Company’s assets.

17. Enforceability; Severability; Survival . If any provision of this Agreement shall be invalid or unenforceable, in whole or in part, such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. Sections 5-7, 10-14, 16-22 and 24 of this Agreement shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination of Executive’s employment (without regard to the reason(s) for such termination).

18. Governing Law . This Agreement shall be construed and enforced in accordance with the laws of the State of Texas without giving effect to Texas’s choice of law rules. This Agreement is deemed to be entered into entirely in the State of Texas. This Agreement shall not be strictly construed for or against either party.

19. No Waiver . No waiver of any term of this Agreement constitutes a waiver of any other term of this Agreement.

20. Amendment To This Agreement . This Agreement may be amended only in writing by an agreement specifically referencing this Agreement, which is signed by both Executive and an executive officer or member of the Board of Directors of the Company authorized to do so by the Board by resolution.

21. Headings . Section headings in this Agreement are for convenience only and shall be given no effect in the construction or interpretation of this Agreement.

22. Notice . All notices made pursuant to this Agreement, shall be given in writing, delivered by a generally recognized overnight express delivery service, and shall be made to the following addresses, or such other addresses as the Parties may later designate in writing:

If to the Company:

Vermillion, Inc.

12117 Bee Caves Road

Building Three, Suite 100

Austin, TX 78738

If to Executive:

James T. LaFrance

XXXXXXXXXX

23. Expense Reimbursement . The Company shall promptly reimburse Executive for reasonable business expenses incurred by Executive in furtherance of or in connection with the performance of Executive’s duties hereunder, including expenditures for travel, in accordance with the Company’s expense reimbursement policy as in effect from time to time; provided that any and all reimbursements hereunder shall be requested and made within one (1) year after being incurred.

24. General; Conflict . This Agreement and the PIIA, when signed by Executive, set forth the terms of Executive’s employment with the Company and supersede any and all prior representations and agreements, whether written or oral.

[Signature Page Follows]

VERMILLION, INC.

a Delaware corporation


Date: July 23, 2014
	/s/ James T. LaFrance Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Date: July 23, 2014
	/s/ Eric J. Schoen Vice President of Finance and Chief Accounting Officer (Principal Executive Officer)

E xhibit 10.2

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

This Confidential Separation Agreement and General Release ("Agreement") is between Thomas McLain ("Executive") and Vermillion, Inc. (“Company").

WHEREAS, Executive and Company are parties to that certain Employment Agreement effective as of March 18, 2013 (the “Employment Agreement”); and

WHEREAS, Executive and Company are parties to that certain Proprietary Information and Inventions Agreement (“PIIA”), that certain Stock Option Award Agreement, dated March 27, 2013 and as revised February 4, 2014, and that certain Stock Option Award Agreement, dated March 27, 2014 (both Stock Option Award Agreements together, the “Option Award Agreements”);

NOW THEREFORE, in consideration of the mutual promises and agreements contained herein and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Executive and Company agree as follows:

1. Executive’s employment with Company is hereby terminated at the close of business on April 23, 2014 (the “Separation Date”). Executive hereby is removed from any and all board, officer, committee and other positions that Executive holds with Company and, as applicable, its affiliates as of the Separation Date.

2. Provided that Executive signs and returns this Agreement to Company within 21 days after his receipt thereof (but not before the Separation Date), does not revoke this Agreement pursuant to Section 10 below, and complies with the terms of this Agreement, the Employment Agreement (including, without limitation, Sections 10-12 thereof) and the PIIA, (a) Executive shall be entitled to the special severance benefits set forth in Sections 5(i) and (ii) of the Employment Agreement (the “Severance Benefits”), subject to the terms and conditions of Section 5 of the Employment Agreement, and (b) notwithstanding anything to the contrary in the Option Award Agreements, all outstanding stock options subject to the Option Award Agreements to the extent vested and exercisable as of the Separation Date shall remain exercisable until the earliest to occur of (i) the 12-month anniversary of the Separation Date, (ii) the date on which such stock options would have expired if Executive’s employment had continued through the full term of such stock options and (iii) the date on which Executive breaches this Agreement, the PIIA or any other agreement between Executive and the Company or any of its affiliates. The Severance Benefits shall commence at such time(s) as set forth in Section 5 of the Employment Agreement. Executive agrees that he would not otherwise be entitled to, or receive, Severance Benefits and the other benefits set forth in this Section 2 if he did not sign this Agreement.

3. Regardless of whether he signs this Agreement, Executive also will receive any earned and unpaid base salary and vacation pay through the Separation Date, payable in accordance with Company policy. Executive’s employee benefits after the Separation Date will be determined by applicable benefit plans (as in effect or amended from time to time in Company’s discretion). Executive agrees that Company and the other Released Parties (as defined below) do not owe him any other amounts except as contained in Section 5 of the

Employment Agreement or set forth in Sections 2 or 3 of this Agreement, including without limitation any salary, bonus, severance pay, or other payments or benefits of any kind.

4. “Released Parties” as used in this Agreement include: (a) Company and its past, present, and future parents, divisions, subsidiaries, partnerships, affiliates, and other related entities, and (b) each of the foregoing entities' and persons’ past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, members, associates, agents, employees, and attorneys, and (c) the predecessors, successors and assigns of each of the foregoing persons and entities.

5. Executive, and anyone claiming through Executive or on his behalf, hereby waives and releases Company and the other Released Parties with respect to any and all claims, whether currently known or unknown, that Executive now has or has ever had against Company or any of the other Released Parties arising from or related to any act, omission, or thing occurring or existing at any time prior to or on the date on which Executive signs this Agreement. Without limiting the generality of the foregoing, the claims waived and released by Executive hereunder include, but are not limited to, all claims under the Age Discrimination in Employment Act; all claims under any other federal, state, local, employment, services or other law, regulation, ordinance, constitutional provision, executive order or other source of law; all claims arising out of Executive’s employment, compensation, other terms and conditions of employment, or termination from employment; all claims for employment discrimination, harassment, retaliation and failure to accommodate; and all contract, tort and other common law claims, including without limitation all claims for breach of contract (oral, written or implied) (including, without limitation, the Employment Agreement and the Option Award Agreements), wrongful termination, defamation, invasion of privacy, infliction of emotional distress, tortious interference, fraud, estoppel and unjust enrichment. Notwithstanding the foregoing, the releases and waivers in this Section 5 shall not apply to any claim for unemployment or workers’ compensation, or a claim that by law is non-waivable. Executive confirms that he has not filed any legal or other proceeding(s) against any of the Released Parties, is the sole owner of the claims released herein, has not transferred any such claims to anyone else, and has the full right to grant the releases and agreements in this Agreement. In the event of any further proceedings based upon any released matter, none of the Released Parties shall have any further monetary or other obligation of any kind to Executive, and Executive hereby waives any such monetary or other recovery.

6. Except as required by law, Executive will not disclose the existence or terms of this Agreement to anyone except his accountants, attorneys and spouse, and shall ensure that each such person complies with this confidentiality provision. Executive will immediately return to Company all documents and other property of Company and the other Released Parties.

7. Executive hereby reaffirms and confirms that he remains subject to, and shall continue to comply with, Sections 10-12 of the Employment Agreement. Executive agrees that he has no present or future right to employment with Company or any of the other Released Parties and will not apply for employment with any of them.

8. Following the Separation Date, Executive shall cooperate fully with Company and the other Released Parties in transitioning his responsibilities as requested by Company, and shall cooperate fully in any administrative, investigative, litigation or other legal matter(s) that may arise or have arisen involving Company or any of the other Released Parties and which in any way relate to or involve Executive’s employment with Company. The Executive's obligation to cooperate hereunder shall include, without limitation, meeting and conferring with such

persons at such times and in such places as Company and the other Released Parties may reasonably require, and giving truthful evidence and truthful testimony and executing and delivering to Company and any of the other Released Parties any truthful papers reasonably requested by any of them. The Executive shall be reimbursed for reasonable out-of-pocket expenses that the Executive incurs in rendering cooperation after the Separation Date pursuant to this Section 8.

9. Nothing in this Agreement is intended to or shall be construed as an admission by Company or any of the other Released Parties that any of them violated any law, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Executive or otherwise. The Released Parties expressly deny any such illegal or wrongful conduct.

10. Executive understands and agrees that: (a) this is the full and final release of all claims against the Released Parties through the date he signs this Agreement; (b) he knowingly and voluntarily releases claims hereunder for valuable consideration to which he is not otherwise entitled; (c) he hereby is and has been advised of his right to have his attorney review this Agreement (at his cost) before signing it; (d) he has 21 days to consider whether to sign this Agreement; and (e) he may, at his sole option, revoke this Agreement upon written notice delivered to Company’s Vice President, Finance and Chief Accounting Officer at 12117 Bee Caves Road, Building III, Suite 100, Austin, Texas 78738, within 7 days after signing it. This Agreement will not become effective until this 7-day period has expired and will be void if Executive revokes it within such period or if Executive executes it before the Separation Date.

11. This Agreement embodies the entire agreement of the parties regarding the matters described herein and supersedes any and all prior and/or contemporaneous agreements, oral or written, between the parties regarding such matters and Executive and Company agree that the Employment Agreement is terminated, null and void as of the Separation Date, provided that (a) Sections 5, 7, 10-14 and 16-22 and 24 of the Employment Agreement, (b) the PIIA and (c) the Option Award Agreements (except as expressly modified in Section 2(b) above), all shall survive the termination of Executive’s employment and the Employment Agreement and continue in full force and effect in accordance with their respective terms. This Agreement is enforceable by Company and its affiliates and may be assigned or transferred by Company to, and shall be binding upon and inure to the benefit of, any parent or other affiliate of Company or any person which at any time, whether by merger, purchase, or otherwise, acquires all or substantially all of the assets, stock or business of the Company or of any division thereof. Executive may not assign any of his rights or obligations under this Agreement. This Agreement is governed by the internal laws of the State of Texas, and may be modified only by a writing signed by both parties. Any party's failure to enforce this Agreement in the event of one or more events which violate this Agreement shall not constitute a waiver of any right to enforce this Agreement against subsequent violations. Any provision of this Agreement found unenforceable by a court shall be severed without affecting the remainder of this Agreement.

12. It is intended that any amounts payable under this Agreement will be exempt from (or, if applicable, comply with) Section 409A of the Internal Revenue Code of 1986, as amended, and the treasury regulations relating thereto, and this Agreement shall be interpreted and construed accordingly. Any reimbursement payable to Executive pursuant to this Agreement shall in no event be paid later than the last day of the calendar year following the calendar year in which the Executive incurred the reimbursable expense. Any amount of expenses eligible for reimbursement or in-kind benefit provided during a calendar year shall not

affect the amount of expenses eligible for reimbursement or in-kind benefit to be provided during any other calendar year. The right to reimbursement or to an in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.

13. This Agreement may be executed in two counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument.

THE PARTIES STATE THAT THEY HAVE READ THE FOREGOING, UNDERSTAND EACH OF ITS TERMS, AND INTEND TO BE BOUND THEREBY:

THOMAS McLAIN VERMILLION, INC.


__/s/ Thomas McLain _____	By: __/s/ Eric Schoen___
	Title: VP, Finance & CAO ____
Date:____ 5/2/2014 _______	Date:_____ 5/9/14 __________

Exhibit 31.1

Certification of the Chief Executive Officer Pursuant to Section 302 of

The Sarbanes-Oxley Act Of 2002

I, James T. LaFrance , certify that:

I have reviewed this quarterly report on Form 10-Q of Vermillion, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2014

/s/ James T. LaFrance

James T. LaFrance

President and Chief Executive Officer

E xhibit 31.2

Certification of the Chief Accounting Officer Pursuant to Section 302 of

The Sarbanes-Oxley Act Of 2002

I, Eric J. Schoen , certify that:

I have reviewed this quarterly report on Form 10-Q of Vermillion, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14 , 2014

/s/ Eric J. Schoen

Eric J. Schoen

Vice President, Finance and Chief Accounting Officer

E xhibit 32. 1

Certification of the Chief Executive Officer and Chief Accounting Officer

Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

with Respect to the Quarterly Report on Form 10-Q

for the Period Ended June 30 , 2014

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Vermillion, Inc., a Delaware corporation (the “Company”), does hereby certify, to the best of such officer’s knowledge, that:

The Company’s quarterly report on Form 10-Q for the period ended June 30 , 2014 , (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 14 , 2014	/s/ James T. LaFrance
	James T. LaFrance President and Chief Executive Officer (Principal Executive Officer)

Date: August 14 , 2014	/s/ Eric J. Schoen
	Eric J. Schoen Vice President, Finance and Chief Accounting Officer (Principal Financial Officer)

The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Form 10-Q or as a separate disclosure document of the Company or the certifying officers.